Adjustments in the balance sheets: is it normal, this ‘new normal’?

Liviu Voinea, Alexie Alupoaiei, Florin Dragu and Florian Neagu

Chapter 8 in Debt Default and Democracy, 2018, pp 155-189 from Edward Elgar Publishing

Abstract: The chapter investigates the potential impact of overall debt and sectoral indebtedness (i.e. households, non-financial corporations, government, private and external) on economic growth. To this end, two quantitative approaches are employed. First, a multivariate panel logit model with fixed effects is used to assess the response of the recession probability to various threshold values of debt across several emerging European economies. Secondly, an asset pricing model is also applied in order to cross-check the regression results. The study takes a macroprudential perspective, by looking for solutions to reach the intermediate macroprudential objective of preventing excessive indebtedness. One important conclusion the results bring forward is that ‘one size fits all’ type of measures or thresholds might not be the optimal solution, as countries can bear various debt levels. Similarly, the different sectors investigated in this chapter proved to have a contrasting resilience to different debt values.

Keywords: Economics and Finance (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.elgaronline.com/view/edcoll/9781788117920/9781788117920.00017.xml (application/pdf)
Our link check indicates that this URL is bad, the error code is: 503 Service Temporarily Unavailable

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:elg:eechap:18261_8

Ordering information: This item can be ordered from
http://www.e-elgar.com

Access Statistics for this chapter

More chapters in Chapters from Edward Elgar Publishing
Bibliographic data for series maintained by Darrel McCalla ().