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The Persistence of the 2008-2009 Recession and Insolvency Filings in Canada

Samir Amine () and Wilner Predelus ()
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Samir Amine: Universite du Quebec en Outaouais and Cirano (Canada)
Wilner Predelus: Universite du Quebec en Outaouais

Economics Bulletin, 2019, vol. 39, issue 1, 84-93

Abstract: During the 2008 economic downturn, Canada experienced at a very early stage, a significant increase in consumer insolvency filings that seems to last indefinitely, even in the presence of satisfactory macroeconomic fundamentals. This situation contrasts with the long-standing assumption on the main function of consumer insolvency filings as a last resort insurance against hazards that can affect consumers' consumption. This paper investigates the role of the persistence of the great recession on consumer insolvency filings in Canada to observe that insolvency filings follow a self-driving process. It further observes that, although consumer insolvency filings remain very high long after the crisis, the persistence of the latter disappeared after fourteen months, and therefore cannot be accounted for the rise in insolvency filings that persisted long after the recession in Canada.

Keywords: consumer insolvency; insurance; recession; Canada. (search for similar items in EconPapers)
JEL-codes: C3 G3 (search for similar items in EconPapers)
Date: 2019-01-10
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