Create an Account
username: password:
 
  MemeStreams Logo

The Rise in US Household Indebtedness: Causes and Consequences | FRB

search

possibly noteworthy
Picture of possibly noteworthy
My Blog
My Profile
My Audience
My Sources
Send Me a Message

sponsored links

possibly noteworthy's topics
Arts
Business
Games
Health and Wellness
Home and Garden
Miscellaneous
  Humor
Current Events
  War on Terrorism
Recreation
Local Information
  Food
Science
Society
  International Relations
  Politics and Law
   Intellectual Property
  Military
Sports
Technology
  Military Technology
  High Tech Developments

support us

Get MemeStreams Stuff!


 
The Rise in US Household Indebtedness: Causes and Consequences | FRB
Topic: Society 6:41 am EDT, Aug 31, 2007

Damn that innovation!

The ratio of total household debt to aggregate personal income in the United States has risen from an average of 0.6 in the 1980s to an average of 1.0 so far this decade.

In this paper we explore the causes and consequences of this dramatic increase.

Demographic shifts, house price increases, and financial innovation all appear to have contributed to the rise. Households have become more exposed to shocks to asset prices through the greater leverage in their balance sheets, and more exposed to unexpected changes in income and interest rates because of higher debt payments relative to income. At the same time, an increase in access to credit and higher levels of assets should give households, on average, a greater ability to smooth through shocks.

We conclude by discussing some of the risks associated with some households having become very highly indebted relative to their assets.

The Rise in US Household Indebtedness: Causes and Consequences | FRB



 
 
Powered By Industrial Memetics
RSS2.0