Danish paper examines effects of household leverage
Researchers find effect of household leverage on consumption varies during a crisis
A working paper published by the National Bank of Denmark has found that the effect of household leverage on consumption varies throughout the course of a financial crisis.
The paper, Household debt and consumption during the financial crisis, by Asger Lau Andersen, Charlotte Duus and Thais Lærkholm Jensen, uses data from 800,000 Danish families over the period 2007–11 to assess the effects of household debt on consumption. The researchers find that while the consumption of highly leveraged
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