Riksbank paper measures impact of debt-to-income limits
Limits seem to be a useful measure
Debt-to-income limits seem to be an effective measure for limiting household indebtedness, although no macro models currently capture their full effects, according to a study published today (June 2) by Sveriges Riksbank.
Analysis by Gustav Alfelt, Björn Lagerwall and Dilan Ölcer tests two calibrations of a debt-to-income limit: one at 400% of income and the other at 600%. The tougher 400% would bind on 39% of the population, compared with 12% for the 600% limit.
The authors note the limits only
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