Household debt, financialization, and macroeconomic performance in the United States, 1951-2009

Yk Kim

Journal of Post Keynesian Economics, 2013, vol. 35, issue 4, 675-694

Abstract: We empirically examine the relationship between U.S. output and household debt. To account for structural change due to financial liberalization, we divide the sample at the fourth quarter of 1982. We find structural differences between earlier and later business cycles for the U.S. household sector and its relation to the macroeconomy. In the regression analysis for pre-1982, we find no evidence that household debt variables had any negative effect on output. However, we find some evidence that household debt variables have negative effects on output for the post-1982 period. A formal structural break test shows evidence of a structural change in the relationship of U.S. output to household debt. Unit root tests for the separate samples show that none of the household variables possesses a unit root in the earlier period, yet all of them do in the late period, indicating fundamental differences between earlier and later periods in terms of the data-generating process.

Date: 2013
References: Add references at CitEc
Citations: View citations in EconPapers (28)

Downloads: (external link)
http://hdl.handle.net/10.2753/PKE0160-3477350408 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mes:postke:v:35:y:2013:i:4:p:675-694

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/MPKE20

DOI: 10.2753/PKE0160-3477350408

Access Statistics for this article

More articles in Journal of Post Keynesian Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().