2 thoughts on ““Sectoral debt and global dollar cycles in developing economies””

  1. Macroduck

    “Among developed EMEs, higher expected household debt growth magnifies the impact of US dollar fluctuations on economic activity, with significant but less persistent effects on consumption and more persistent effects on investment.”

    So household debt has a greater effect on future investment than on future consumption?

    In some economies, “households” are often productive entities. Goats and pumps and sewing machines may be acquired with borrowed money. Maybe that’s whats happening? But these are EMEs, not frontier economies, so this looks like a weak explanation.

    Borrowing by some other sector limits availability of credit to firms? I’ll buy that. But less so to households? That’s odd. We know households smooth consumption pretty much any way they can, so maybe other methods of smoothing offset the drag from household indebtedness?

    Also, and I know I keep yapping about it, but household debt as a predictor of future growth – sounds like Mian, Sufi and Verner:

    https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2655804

    1. Moses Herzog

      You may have guessed I’m a big “Mian and Sufi” fanboy, Got the book in hand;s reach in this God-forsaken house, I got my Chinn, other guy paperback here somewhere (sorry “other guy” prof, I’m stupid sometimes)

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