Exploring the link between household debt and income inequality: an asymmetric approach

Apostolos Fasianos, Hamid Raza, Stephen Kinsella

Research output: Contribution to journalArticlepeer-review

Abstract

We investigate the relationship between household debt and income inequality in the USA, allowing for asymmetry, using data over the period 1913–2008. We find evidence of an asymmetric cointegration between household debt and inequality for different regimes. Our results indicate household debt only responds to positive changes in income inequality, while there is no evidence of falling inequality significantly affecting household debt. The presence of this asymmetry provides further empirical insights into the emerging literature on household debt and inequality.

Original languageEnglish
Pages (from-to)404-409
Number of pages6
JournalApplied Economics Letters
Volume24
Issue number6
DOIs
Publication statusPublished - 30 Mar 2017

Keywords

  • credit asymmetry
  • Household debt
  • income inequality
  • nonlinear ARDL

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