The determinants of Australian household debt: A macro level study

Xianming Meng, Nam Hoang and Mahinda Siriwardana ()

Journal of Asian Economics, 2013, vol. 29, issue C, 80-90

Abstract: This paper employs a cointegrated Vector Autoregression (CVAR) model to explore the determinants of Australian household debt. The results show that housing prices, GDP and the population in the economy have a positive effect on household borrowing. Meanwhile, interest rates, the unemployment rate, the number of new dwellings and inflation are found to have a negative effect on Australian household debt. Of these, interest rates are the most significant. Based on these results, it is judicious to rein in household debt during economic booms through monitoring and intervening in the assets market and using monetary policy in a timely, comprehensive, and careful manner.

Keywords: Australian household debt; Cointegrated VAR modelling; Housing market; Housing prices; Interest rates (search for similar items in EconPapers)
JEL-codes: C32 E24 H60 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (32)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:asieco:v:29:y:2013:i:c:p:80-90

DOI: 10.1016/j.asieco.2013.08.008

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