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Journal articles
Out of balance? Revisiting the nexus of income inequality, household debt, and current account imbalances after the Great Recession
Abstract : Rising current account imbalances around the globe preceded the Great Recession in the late 2000s. These imbalances narrowed significantly during the crisis mainly due to a negative demand shock and plummeting imports in deficit countries. While income inequality and household debt played a pivotal role in current account imbalances prior to the crisis, it is unclear whether these relations still hold when including the post-crisis era. We estimate current account determinants using a panel of 31 OECD countries over 45 years and include measures for functional and personal income distribution as well as household debt. We find a sustained relation between income inequality and current accounts when including the post-crisis period, while the link to household debt diminishes, indicating a change in the debt regime in a number of countries.
https://hal-paris1.archives-ouvertes.fr/hal-03346183
Contributor : Fabio Ascione Connect in order to contact the contributor
Submitted on : Thursday, September 16, 2021 - 10:43:10 AM
Last modification on : Friday, April 29, 2022 - 10:12:43 AM
Contributor : Fabio Ascione Connect in order to contact the contributor
Submitted on : Thursday, September 16, 2021 - 10:43:10 AM
Last modification on : Friday, April 29, 2022 - 10:12:43 AM