Canada: Selected Issues

International Monetary Fund

No 2013/041, IMF Staff Country Reports from International Monetary Fund

Abstract: This paper assesses the impact of high household debt on economic volatility in Canada. The debt per se may not necessarily be a risk for economic activity; it can amplify other shocks as well. A few studies have emphasized the link between the growth of household debt before 2007 and the severity of the Great Recession. Economies with debt tend to experience more severe housing busts and recessions. If household debt ratios are not stabilized, the vulnerability of the Canadian economy is likely to be high.

Keywords: ISCR; CR; price; housing stock; debt; household debt; credit growth; high-leverage economy consumption; housing completion; Housing; Housing prices; Mortgages; Real effective exchange rates; Commodity prices; Global (search for similar items in EconPapers)
Pages: 60
Date: 2013-02-14
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Citations: View citations in EconPapers (3)

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