Time-varying influence of household debt on inequality in United Kingdom

Edmond Berisha (), David Gabauer, Rangan Gupta and Chi Keung Lau
Additional contact information
Edmond Berisha: Montclair State University

Empirical Economics, 2021, vol. 61, issue 4, No 8, 1917-1933

Abstract: Abstract The United Kingdom (UK) in terms of income inequality is ranked among the highest in Europe. Likewise, within the last four decades, UK is characterized with drastic increases in household debt. In this paper, we analyze time-varying predictability of growth in household debt for growth in income (and consumption) inequality based on a high-frequency (quarterly) data set over 1975:Q2 to 2016:Q1. Results indicate that the growth in household debt has a strong predictive power, both for within and out-of-samples, on growth rate of income (and consumption) inequality in the UK. Interestingly, the strength of the predictive power is found to have increased after 2008. Based on time-varying impulse response functions, we also find that higher growth rate in household debt corresponds with subsequent increases in income inequality.

Keywords: Household debt; Inequality; Time-varying predictions (search for similar items in EconPapers)
JEL-codes: C32 C53 D63 E30 E40 G51 R31 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s00181-020-01940-1 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
Working Paper: Time-Varying Influence of Household Debt on Inequality in United Kingdom (2020)
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:spr:empeco:v:61:y:2021:i:4:d:10.1007_s00181-020-01940-1

Ordering information: This journal article can be ordered from
http://www.springer. ... rics/journal/181/PS2

DOI: 10.1007/s00181-020-01940-1

Access Statistics for this article

Empirical Economics is currently edited by Robert M. Kunst, Arthur H.O. van Soest, Bertrand Candelon, Subal C. Kumbhakar and Joakim Westerlund

More articles in Empirical Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().