Mapping the fragility of U.S. household finance: social classes and the functions of wealth

Orsola Costantini and Carlo D’Ippoliti

Journal of Post Keynesian Economics, 2026, vol. 49, issue 2, 265-305

Abstract: This paper investigates U.S. household financial fragility from a Classical perspective inspired by Pasinetti’s work. Focusing on class differences, we use eleven waves of the Survey of Consumer Finances to examine how debt patterns and borrowing motives relate to financial vulnerability over the four decades before the global pandemic. Our framework connects household-level behavior with macroeconomic conditions and allows for a unified evaluation of competing explanations for rising indebtedness. We find that relative poverty, income inequality, and limited access to essential services are key drivers of household debt, while macroeconomic factors—especially interest-rate policy—play a central role in shaping its sustainability.

Date: 2026
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DOI: 10.1080/01603477.2026.2631645

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