Stress testing the household sector in Mongolia
Gan-Ochir Doojav () and
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Ariun-Erdene Bayarjargal: Ardnt-Corden Department of Economics, Australian National University, 132 Lennox Crossing ACT 2601, Australia
Asia-Pacific Development Journal, 2017, vol. 24, issue 2, 23-52
The present paper contains an outline of a simulation-model for stress testing the household sector in Mongolia. The model uses data from the Household Socio-Economic Survey to assess the financial resilience of the household sector to macroeconomic shocks. The results suggest that the household sector of Mongolia is vulnerable to shocks associated with interest rates, cost of basic consumption, asset prices and unemployment. In particular, impacts of interest and consumer price shocks on householdâ€™s debt at risk (or expected loan losses) are considerable. Furthermore, it has been found that a substantial increase in household indebtedness has boosted the financial fragility of the household sector. Those results have important policy implications in mitigating the increasing financial fragility of the household sector and risks to financial stability.
Keywords: Stress testing; household indebtedness; household surveys; Mongolia (search for similar items in EconPapers)
JEL-codes: C15 D14 D31 E17 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:unt:jnapdj:v:24:y:2017:i:2:p:23-52
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