IMF Working Papers

Excessive Private Sector Leverage and Its Drivers: Evidence from Advanced Economies

By Mariusz Jarmuzek, Rossen Rozenov

March 28, 2017

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Mariusz Jarmuzek, and Rossen Rozenov. Excessive Private Sector Leverage and Its Drivers: Evidence from Advanced Economies, (USA: International Monetary Fund, 2017) accessed December 23, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Nonfinancial private sector debt increased significantly in advanced economies prior to the global financial crisis and, with a few exceptions, deleveraging has been limited. Furthermore, in some countries households and corporations have continued to accumulate debt. Drawing on the literature, the paper aims to provide a quantitative assessment of the gaps between actual and sustainable levels of debt and to identify the key factors that drive excessive borrowing. Results suggest that variables that are typically found important in studies focusing on borrowing decisions, are also relevant for explaining the debt sustainability gaps.

Subject: Debt burden, External debt, Financial institutions, Housing prices, Income, Labor, Mortgages, National accounts, Prices

Keywords: Corporate capital structure, Debt, Debt build-up, Debt burden, Debt carrying capacity, Debt decision, Financial asset, Global, Household and corporate leverage, Household debt sustainability analysis, Housing prices, Income, Mortgages, Price, Private debt sustainability, Sustainability gap, Taxation, WP

Publication Details

  • Pages:

    30

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2017/072

  • Stock No:

    WPIEA2017072

  • ISBN:

    9781475589573

  • ISSN:

    1018-5941

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