Why household debt makes economies prone to crises of confidence

Item Type Other
Abstract Crises of confidence turn booms into busts. Bloated household balance sheets and high debt offer the right ingredients for a confidence-driven housing bust. This column develops an analytic framework that accommodates the potential role of confidence fluctuations as a source of uncertainty in the economy. Current debt levels are shown to determine the exposure to crises of confidence. The results point to a clear role for macroprudential policy in the prevention of such crises.
Authors Hintermaier, Thomas & Koeniger, Winfried
Language English
Keywords Crises of confidence, household debt
Subjects economics
HSG Classification contribution to practical use / society
HSG Profile Area SEPS - Economic Policy
Refereed No
Date 9 January 2016
Publisher VOX (CEPR's Policy Portal)
Official URL http://www.voxeu.org/article/household-debt-and-cr...
Depositing User Caroline Ubieto
Date Deposited 13 Jan 2016 16:58
Last Modified 20 Jul 2022 17:26
URI: https://www.alexandria.unisg.ch/publications/246685


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Hintermaier, Thomas & Koeniger, Winfried: Why household debt makes economies prone to crises of confidence. [Other]


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