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The Walking Debt: Exploring Economic Inequality

André, Marcus LU and Nystedt, Ludvig LU (2024) NEKH04 20241
Department of Economics
Abstract
This paper investigates whether increased economic inequality leads to higher
household indebtedness, a factor often associated with economic risk and
instability. Utilizing data on income and wealth distribution, domestic credit,
and variables controlling for credit expansion across 16 OECD countries from
1980 to 2016, a series of panel data regressions were performed. The results
negate the posited hypotheses, instead indicating a negative relationship
between economic inequality and household indebtedness. This negative
correlation is observed both between income inequality and indebtedness, as
well as between wealth inequality and indebtedness. These findings challenge
the hypotheses of positive relationships between the... (More)
This paper investigates whether increased economic inequality leads to higher
household indebtedness, a factor often associated with economic risk and
instability. Utilizing data on income and wealth distribution, domestic credit,
and variables controlling for credit expansion across 16 OECD countries from
1980 to 2016, a series of panel data regressions were performed. The results
negate the posited hypotheses, instead indicating a negative relationship
between economic inequality and household indebtedness. This negative
correlation is observed both between income inequality and indebtedness, as
well as between wealth inequality and indebtedness. These findings challenge
the hypotheses of positive relationships between the variables and contradict a
significant portion of prior research on the topic. Further research is needed to
elucidate the true relationship and causality between economic inequality and
household indebtedness, thereby aiding policymakers in the pursuit of economic
stability. (Less)
Please use this url to cite or link to this publication:
author
André, Marcus LU and Nystedt, Ludvig LU
supervisor
organization
course
NEKH04 20241
year
type
M2 - Bachelor Degree
subject
keywords
income inequality, wealth inequality, household indebtedness
language
Swedish
id
9167074
date added to LUP
2024-09-24 11:25:47
date last changed
2024-09-24 11:25:47
@misc{9167074,
  abstract     = {{This paper investigates whether increased economic inequality leads to higher
household indebtedness, a factor often associated with economic risk and
instability. Utilizing data on income and wealth distribution, domestic credit,
and variables controlling for credit expansion across 16 OECD countries from
1980 to 2016, a series of panel data regressions were performed. The results
negate the posited hypotheses, instead indicating a negative relationship
between economic inequality and household indebtedness. This negative
correlation is observed both between income inequality and indebtedness, as
well as between wealth inequality and indebtedness. These findings challenge
the hypotheses of positive relationships between the variables and contradict a
significant portion of prior research on the topic. Further research is needed to
elucidate the true relationship and causality between economic inequality and
household indebtedness, thereby aiding policymakers in the pursuit of economic
stability.}},
  author       = {{André, Marcus and Nystedt, Ludvig}},
  language     = {{swe}},
  note         = {{Student Paper}},
  title        = {{The Walking Debt: Exploring Economic Inequality}},
  year         = {{2024}},
}