Household Debt, Corporate Debt, and the Real Economy: Some Empirical Evidence

Abstract

This publication empirically assesses the effect of private debt buildup—household and corporate debt—on the real economy in advanced and emerging market economies. The research indicates that the buildup of corporate debt causes more financial peaks than the buildup of household debt in both groups of countries. But in emerging market economies, findings suggest that recessions induced by corporate debt inflict more damage on output than those induced by household debt.