BOFIT Discussion Papers, Institute for Economies in Transition, Bank of Finland
No 7/2011:
Households’ response to economic crisis
Petr Jakubik ()
Abstract: This paper studies the economic impact of the current
global economic downturn on the household sector. Household budgets can be
negatively affected by declines in nominal wages and increases in
unemployment. We empirically test this effect for the small open emerging
economy. As a result of a lack of individual data on household finances,
micro data are simulated. Our analysis clearly shows that there is a
significant additional decline in consumption related to an increase in
household default rates and unemployment. We find that potential household
insolvencies have important implications for the financial system as well
as for the macroeconomy.
Keywords: credit cycle; households’ distress; insolvency; household default; aggregate consumption; (follow links to similar papers)
JEL-Codes: G28; G32; G33; G38; (follow links to similar papers)
30 pages, May 6, 2011, Revised May 16, 2011
Before downloading any of the electronic versions below
you should read our statement on
copyright.
Download GhostScript
for viewing Postscript files and the
Acrobat Reader for viewing and printing pdf files.
Full text versions of the paper:
DP0711.pdf 
Download Statistics
Questions (including download problems) about the papers in this series should be directed to Päivi Määttä ()
Report other problems with accessing this service to Sune Karlsson ()
or Helena Lundin ().
Programing by
Design by Joachim Ekebom
