Households’ Indebtedness and Financial Fragility

Tullio Jappelli (), Marco Pagano and Marco Di Maggio

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: The paper studies the determinants of international differences in household indebtedness, and inquires whether indebtedness is associated with increased “financial fragility”, as measured by the sensitivity of household arrears and insolvencies to macroeconomic shocks. It also investigates whether financial fragility is affected by institutional factors, such as information sharing arrangements, judicial efficiency and individual bankruptcy regulation. We address these issues by tapping three data sets: (i) cross-country data on household indebtedness; (ii) European panel data for households lending and arrears; and (iii) time series data for household lending and insolvencies in the U.K., the U.S.A. and Germany. Overall, the analysis underscores the importance of institutional arrangements in determining the size and fragility of household credit markets.

Keywords: household debt; financial fragility; arrears; insolvency; information sharing; judicial efficiency; bankruptcy law (search for similar items in EconPapers)
JEL-codes: D14 G21 G28 G33 (search for similar items in EconPapers)
Date: 2008-10-15, Revised 2010-09-09
New Economics Papers: this item is included in nep-ban, nep-eec and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (46)

Published in Journal of Financial Management Markets and Institutions, vol. 1, n. 1, 23-46, 2013.

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Journal Article: Households' indebtedness and financial fragility (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:sef:csefwp:208

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