Publication detail

Household balance sheets and economic crisis

Author(s): doc. PhDr. Ing. Ing. Petr Jakubík Ph.D. Ph.D.,
Type: Articles in refereed journals
Year: 2014
Number: 0
Published in: Ekonomická revue - Central European Review of Economics Issues, vol. 17, no. 2, pp 55-65, ISSN 1212-3951
Publishing place: VŠB - Technical University of Ostrava
Keywords: Aggregate consumption, credit cycle, household default, households’ distress, credit risk modelling, micro simulations, insolvency
JEL codes:
Suggested Citation:
Grants: GACR 14-02108S The nexus between sovereign and bank crises GACR 403/10/1235 (2010-2014) Institutional Responses to Financial Market Failures
Abstract: In this paper, the impact of an economic downturn on the household sector is studied. Household budgets can be negatively affected by declines in nominal wages and increases in unemployment. This effect is tested for the small, open, emerging economy using the estimated macro model. As a result of a lack of individual data on household finances, micro data are simulated. It is clearly shown by the conducted analysis that there is a significant additional decline in consumption related to an increase in household default rates and unemployment. It is found that potential household insolvencies have important implications for the financial system as well as for the macroeconomy.


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