The determinants of Australian household debt: A macro level study

Author(s)
Meng, Xianming
Hoang, Nam
Siriwardana, Mahinda
Publication Date
2013
Abstract
This paper employs a cointegrated Vector Autoregression (CVAR) model to explore the determinants of Australian household debt. The results show that housing prices, GDP and the population in the economy have a positive effect on household borrowing. Meanwhile, interest rates, the unemployment rate, the number of new dwellings and inflation are found to have a negative effect on Australian household debt. Of these, interest rates are the most significant. Based on these results, it is judicious to rein in household debt during economic booms through monitoring and intervening in the assets market and using monetary policy in a timely, comprehensive, and careful manner.
Citation
Journal of Asian Economics, v.29, p. 80-90
ISSN
1873-7927
1049-0078
Link
Publisher
Elsevier BV
Title
The determinants of Australian household debt: A macro level study
Type of document
Journal Article
Entity Type
Publication

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