The determinants of household debt and balance sheets in the United Kingdom

Merxe Tudela and Garry Young

Bank of England working papers from Bank of England

Abstract: Household indebtedness has grown sharply in the United Kingdom in recent years. This paper proposes a framework for understanding this based on a model in which households are assumed to plan their lifetime spending rationally, allowing for bequests to future generations. The model is set up to be consistent with both aggregate and disaggregated balance sheet positions as revealed in the British Household Panel Survey. The paper goes on to outline the effect on debt and balance sheets of changes in interest rates, house prices, preferences and retirement income.

Date: 2005-07
New Economics Papers: this item is included in nep-acc, nep-dge, nep-eec and nep-ure
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Citations: View citations in EconPapers (27)

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Persistent link: https://EconPapers.repec.org/RePEc:boe:boeewp:266

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