Assessing and predicting financial vulnerability of Italian households: a micro-macro approach

Alessandra Bettocchi (), Elena Giarda (), Cristiana Moriconi (), Federica Orsini () and Rita Romeo ()
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Alessandra Bettocchi: Prometeia
Cristiana Moriconi: Prometeia
Federica Orsini: Prometeia
Rita Romeo: Prometeia

Empirica, 2018, vol. 45, issue 3, No 7, 587-605

Abstract: Abstract In this study we develop a micro-founded model to analyse the economic-financial conditions of Italian households. Using household level data, we build an indicator to identify vulnerable households based on their budget constraint and the composition of their financial portfolio. Then, we calculate the impact of the predicted trends of macroeconomic variables on the indicator in order to monitor its evolution in the short term (2015–2017). The empirical analysis is based on the Survey of Household Income and Wealth of the Bank of Italy and on a set of macroeconomic forecasts. Our findings suggest that the macroeconomic scenario for the period 2015–2017 implies a progressive reduction in the percentage of vulnerable households for the full extent of the projection.

Keywords: Households’ financial vulnerability; Micro-founded models; Financial margin; Macroeconomic forecasts (search for similar items in EconPapers)
JEL-codes: D10 D14 G10 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (7)

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DOI: 10.1007/s10663-017-9378-2

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