Which Households Have Negative Wealth?
Giacomo De Giorgi and
Wilbert Van der Klaauw
No 20160801, Liberty Street Economics from Federal Reserve Bank of New York
At some point in its life a household?s total debt may exceed its total assets, in which case it has ?negative wealth.? Even if this status is temporary, it may affect the household?s ability to save for durable goods, restrict access to further credit, and may require living in a state of limited consumption. Detailed analysis of the holdings of negative-wealth households, however, is a topic that has received little attention. In particular, relatively little is known about the characteristics of such households or about what drives negative wealth. A better understanding of these factors could also prove valuable in explaining and forecasting the persistence of wealth inequality. In this post, we take advantage of a special module of the Survey of Consumer Expectations to shed light on this issue.
Keywords: Households; Negative Wealth; Survey Data (search for similar items in EconPapers)
JEL-codes: D1 (search for similar items in EconPapers)
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