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Is Personal Debt Sustainable?

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  • Dimitri B. Papadimitriou
  • Anwar Shaikh
  • Claudio H. dos Santos
  • Gennaro Zezza

Abstract

The long economic expansion was fueled by an unprecedented rise in private expenditure relative to income, financed by a growing flow of net credit to the private. On the surface, it seemed that the growing burden of the household sector's debt was counterbalanced by a spectacular rise in the relative value of its financial assets, but this was never a match among equals, and the great meltdown in the financial markets has proved this imbalance to be true. The private sector has dramatically cut back its acquisition of new credit and reversed the path of its financial balance, but this adjustment has been uneven within the sector: the business sector suffered a huge drop in investment while the household sector has continued to borrow.

Suggested Citation

  • Dimitri B. Papadimitriou & Anwar Shaikh & Claudio H. dos Santos & Gennaro Zezza, 2002. "Is Personal Debt Sustainable?," Economics Strategic Analysis Archive 02-11, Levy Economics Institute.
    • Handle: RePEc:lev:levysa:02-11
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    References listed on IDEAS

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    1. Dimitri B. Papadimitriou & L. Randall Wray, "undated". "What to Do with the Surplus: Fiscal Policy and the Coming Recession," Economics Policy Note Archive 98-6, Levy Economics Institute.
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    Cited by:

    1. José Francisco Bellod Redondo, 2011. "Confianza, reformas y crisis económica," Contribuciones a la Economía, Servicios Académicos Intercontinentales SL, issue 2011-05, May.
    2. Korkut A. Ertyrk, "undated". "The Future of the Dollar: Has the Unthinkable Become Thinkable?," Economics Policy Note Archive 03-7, Levy Economics Institute.
    3. Claudio H. Dos Santos, 2004. "A Stock-Flow Consistent General Framework for Minskyan Analysis of Closed Economics," Macroeconomics 0402028, University Library of Munich, Germany.
    4. Gustav A. Horn & Heike Joebges & Torsten Niechoj & Christian R. Proaño & Simon Sturn & Silke Tober & Achim Truger & Till van Treeck, 2009. "Von der Finanzkrise zur Weltwirtschaftskrise (I)," IMK Report 38-2009, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    5. Philip Arestis & Elias Karakitsos, 2003. "How Long Can the U.S. Consumers Carry the economy on Their Shoulders?," General Economics and Teaching 0306003, University Library of Munich, Germany.
    6. L. Randall Wray & Dimitri B. Papadimitriou, "undated". "Understanding Deflation: Treating the Disease, Not the Symptoms," Economics Public Policy Brief Archive ppb_74, Levy Economics Institute.
    7. Anwar Shaikh & Gennaro Zezza & Claudio dos Santos, "undated". "Is International Growth the Way Out of U.S. Current Account Deficits? A Note of Caution," Economics Policy Note Archive 03-6, Levy Economics Institute.
    8. José Francisco Bellod Redondo, 2010. "La Crisis Imposible: Tragedia En Tres Actos," Contribuciones a la Economía, Servicios Académicos Intercontinentales SL, issue 2010-03, March.
    9. James K. Galbraith, "undated". "What is the American Model Really About? Soft Budgets and the Keynesian Devolution ," Economics Public Policy Brief Archive ppb_72, Levy Economics Institute.
    10. Dimitri B. Papadimitriou & Edward Chilcote & Gennaro Zezza, 2006. "Are Housing Prices, Household Debt, and Growth Sustainable?," Economics Strategic Analysis Archive sa_jan_06, Levy Economics Institute.
    11. Dimitri B. Papadimitriou & Anwar Shaikh & Claudio H. dos Santos & Gennaro Zezza, 2004. "Is Deficit-Financed Growth Limited? Policies and Prospects in An Election Year," Economics Strategic Analysis Archive 04-4, Levy Economics Institute.

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    1. Dimitri B. Papadimitriou & Anwar Shaikh & Claudio H. dos Santos & Gennaro Zezza, 2004. "Is Deficit-Financed Growth Limited? Policies and Prospects in An Election Year," Economics Strategic Analysis Archive 04-4, Levy Economics Institute.
    2. L. Randall Wray & Dimitri B. Papadimitriou, "undated". "Understanding Deflation: Treating the Disease, Not the Symptoms," Economics Public Policy Brief Archive ppb_74, Levy Economics Institute.
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