A Generalized Framework for the Assessment of Household Financial Vulnerability

Mindaugas Leika and Daniela Marchettini

No 2017/228, IMF Working Papers from International Monetary Fund

Abstract: Household financial fragility has received considerable attention following the global financial crisis, but substantial gaps remain in the analytical underpinnings of household financial vulnerability assessment, as well as in data availability. This paper aims at integrating the contributions in the literature in a coherent fashion. The study proposes also analytical and estimation extensions aimed at improving the quality of estimates and allowing the assessment of household financial vulnerability in presence of data limitations. The result of this effort is a comprehensive framework, that has wide applicability to both advanced and developing economies. For illustrative purposes the paper includes a detailed application to one developing country (Namibia).

Keywords: WP; gross income; debt service; composite index; interest rate; household; stress test; sensitivity analysis; credit risk; microdata; non-parametric methods; debt payment; debt level; debt obligation; household debt; payments DPh; debt repayment side; household DTI ratio; Personal income; Financial sector risk; Mortgages; Disposable income; Debt burden; Africa; Global (search for similar items in EconPapers)
Pages: 56
Date: 2017-11-07
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Citations: View citations in EconPapers (11)

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