Exploring Differences in Household Debt Across the United States and Euro Area Countries

Michael Ehrmann, Dimitris Christelis and Dimitris Georgarakos

No 15368, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Household debt in the United States has played a central role in the up-run and the aftermath of the global financial crisis. Despite this, our understanding of household debt and potential debt overhang is still limited. To shed light on this issue, we put U.S. household leverage in an international perspective, using household-level data for the United States and ten euro area economies. U.S. households have the highest prevalence of collateralized and non-collateralized debt, hold comparatively large amounts of loans, and face a higher debt-service burden, even though they have higher income and financial wealth. These differences are mainly related to the U.S. economic environment, which appears to be more conducive to both types of debt, primarily because a given level of collateral is associated with higher prevalence of collateralized debt, and larger amounts of it, in the United States.

Keywords: Household debt; Debt burden; Household finance; Counterfactual decompositions (search for similar items in EconPapers)
JEL-codes: D12 E21 G11 (search for similar items in EconPapers)
Date: 2020-10
New Economics Papers: this item is included in nep-mac
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Related works:
Journal Article: Exploring Differences in Household Debt across the United States and Euro Area Countries (2021)
Working Paper: Exploring Differences in Household Debt Across the United States and Euro Area Countries (2017)
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