Australian household debt and the macroeconomic environment
Journal of Economic Studies, 2020, vol. 48, issue 1, 21-34
Purpose - This paper aims to investigate the effect of labour market conditions and monetary policy on households' attitude towards debt in the Australian context. Design/methodology/approach - In doing so, household debt is categorised into housing, and consumer debt and the relationship is empirically tested through the use of a vector error correction model. Findings - Consumer debt is found to be highly dependent on consumption with employment income and unemployment having a statistically insignificant effect, whilst monetary policy showing an inverse relation to consumer debt. The findings suggest that household consumption appears to be the primary determinant for consumer debt, which then behaves as a wage substitute. In terms of housing debt, income and monetary policy positively affect households' decisions with consumption and unemployment having a negative impact on the level of housing debt. The empirical results suggest that housing debt behaves as a proxy for household investment. Originality/value - This paper empirically investigates the impact of selected macroeconomic variables on housing and personal debt separately. The findings suggest that monetary policy and labour market conditions have different impacts on the two separate debt types.
Keywords: Household debt; Secured debt; Unsecured debt; Monetary policy; VECM; E21; E24; E52; G51 (search for similar items in EconPapers)
References: Add references at CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
http://www.emeraldinsight.com/10.1108/JES-10-2019- ... RePEc&WT.mc_id=RePEc (text/html)
Access to full text is restricted to subscribers
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eme:jespps:jes-10-2019-0460
Ordering information: This journal article can be ordered from
Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
Access Statistics for this article
Journal of Economic Studies is currently edited by Professor Mohsen Bahmani-Oskooee
More articles in Journal of Economic Studies from Emerald Group Publishing
Bibliographic data for series maintained by Virginia Chapman ().