Determinants of Household Indebtedness
Evidence from Latin American Countries
DOI:
https://doi.org/10.22370/pe.2024.16.3764Keywords:
Household Debt, Latin America, Panel Data, Empirical Evidence, SavingAbstract
The negative impact that a rapid increase in household debt can have on future economic growth has been well documented in many studies. This has generated great interest among economists to understand what are the factors that can affect said level of debt, both from a theoretical point of view and from a policy maker’s perspective. In general, policy makers will be able to compare the benefits and risks of household debt over various time horizons, while academics will be able to advance their understanding of the subject and its theoretical and practical implications. Because of the literature is scarce for Latin American countries, the objective of this article is to establish the determinants of household indebtedness. For this, we work with an unbalanced panel of 10 countries in the period 2001-2021. The main results show as determinant and significant factors to the savings rate, the loan rate, life expectancy, and the level of financial depth.
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