Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/83302
Authors: 
Jakubík, Petr
Year of Publication: 
2011
Series/Report no.: 
IES Working Paper 20/2011
Abstract: 
This paper studies the economic impact of the current global economic downturn on the household sector. Household budgets can be negatively affected by declines in nominal wages and increases in unemployment. We empirically test this effect for the small open emerging economy. As a result of a lack of individual data on household finances, micro data are simulated. Our analysis clearly shows that there is a significant additional decline in consumption related to an increase in household default rates and unemployment. We find that potential household insolvencies have important implications for the financial system as well as for the macroeconomy.
Subjects: 
credit cycle
households' distress
insolvency
household default
aggregate consumption
JEL: 
G28
G32
G33
G38
Document Type: 
Working Paper
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