A Lagom Level of Debt: Swedish household indebtedness in the 21st century
(2023) EOSK12 20231Department of Economic History
- Abstract
- This thesis studies the causes of rising household and particularly mortgage debt in Sweden between 1995 and 2020. It aims to contribute to the understanding of institutional factors behind increasing debt, such as policy regulating lending. It undertakes a qualitative analysis of previous literature on household debt, and the Financial Accelerator framework. The Financial Accelerator (Bernanke & Gertler, 1989) proposes a procyclical feedback loop between asset values, income, and debt levels. Favourable lending conditions, low interest rates, and an inelastic housing supply are found to be key factors behind the increase in mortgage debt. These factors constitute conditions necessary for a Financial Accelerator to operate, suggesting a... (More)
- This thesis studies the causes of rising household and particularly mortgage debt in Sweden between 1995 and 2020. It aims to contribute to the understanding of institutional factors behind increasing debt, such as policy regulating lending. It undertakes a qualitative analysis of previous literature on household debt, and the Financial Accelerator framework. The Financial Accelerator (Bernanke & Gertler, 1989) proposes a procyclical feedback loop between asset values, income, and debt levels. Favourable lending conditions, low interest rates, and an inelastic housing supply are found to be key factors behind the increase in mortgage debt. These factors constitute conditions necessary for a Financial Accelerator to operate, suggesting a high probability that a Financial Accelerator effect is in place. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9133266
- author
- Krook, Sebastian LU
- supervisor
- organization
- course
- EOSK12 20231
- year
- 2023
- type
- M2 - Bachelor Degree
- subject
- keywords
- household debt, debt-to-income ratio, mortgage, financial stability, Financial Accelerator
- language
- English
- id
- 9133266
- date added to LUP
- 2023-08-30 08:51:05
- date last changed
- 2023-08-30 08:51:05
@misc{9133266, abstract = {{This thesis studies the causes of rising household and particularly mortgage debt in Sweden between 1995 and 2020. It aims to contribute to the understanding of institutional factors behind increasing debt, such as policy regulating lending. It undertakes a qualitative analysis of previous literature on household debt, and the Financial Accelerator framework. The Financial Accelerator (Bernanke & Gertler, 1989) proposes a procyclical feedback loop between asset values, income, and debt levels. Favourable lending conditions, low interest rates, and an inelastic housing supply are found to be key factors behind the increase in mortgage debt. These factors constitute conditions necessary for a Financial Accelerator to operate, suggesting a high probability that a Financial Accelerator effect is in place.}}, author = {{Krook, Sebastian}}, language = {{eng}}, note = {{Student Paper}}, title = {{A Lagom Level of Debt: Swedish household indebtedness in the 21st century}}, year = {{2023}}, }