Private Debt and the Anglo-Liberal Growth Model

Barnes, Lucy

doi:10.1017/gov.2015.17

Cited by 5 publications

(3 citation statements)

References 33 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…As documented by Lucy Barnes, there is no discernable difference between LMEs and CMEs, as conventionally coded, with respect to either levels of household debt or increases in household debt since 1995 and cross--national diversity with respect to rising household indebtedness cuts across the LME/CME divide. 13 In seeking to explain why inequality has grown in some CMEs, CPE scholars have emphasized dualizing institutional reforms and a growing divide between labor--market "insiders" and "outsiders." Kathleen Thelen's recent reformulation of the VofC framework distinguishes two different CME trajectories: "dualization" exemplified by Germany and "embedded flexibilization" exemplified by Sweden and Denmark.…”

Section: Comparative Political Economymentioning

confidence: 99%

Rethinking Comparative Political Economy

2016

View full text Add to dashboard Cite

This paper develops an analytical approach to comparative political economy that focuses on the relative importance of different components of aggregate demand—in the first instance, exports and household consumption—and dynamic relations among the “demand drivers” of growth. We illustrate this approach by comparing patterns of economic growth in Germany, Italy, Sweden, and the United Kingdom over the period 1994–2007. Our discussion emphasizes that export-led growth and consumption-led growth have different implications for distributive conflict.

show abstract

Section: Comparative Political Economymentioning

confidence: 99%

Rethinking Comparative Political Economy

2016

View full text Add to dashboard Cite

show abstract

“…Second, Gerba and Schelkle, while acknowledging that "the Western welfare state prevented a repeat of the Great Depression," argue that the welfare state might have contributed to the rise of indebtedness and the overall process of household financialization (Gerba and Schelkle 2013;. It has also been shown that the quantity of household debt increased not only in liberal countries but also in coordinated market economies-demonstrating that there is not a specific Anglo-liberal pattern to debt growth (Barnes 2016). These arguments imply that the welfare state is complementary to, rather than substitutive of, credit.…”

Section: The Welfare Debt Tradeoff Hypothesis and Its Limitsmentioning

confidence: 99%

The impact of welfare on household debt

Comelli¹

2021

Sociological Spectrum

View full text Add to dashboard Cite

This article aims to advance the theoretical understanding of how welfare affects household needs and willingness to take on debt across OECD countries. Previous sociological literature has attempted to explain indebtedness through the quantity of welfare spending, by searching for a tradeoff between the lack of welfare and the increase of household debt. Based on the "life cycle" hypothesis, according to which people take on debt when they are younger and pay it off as they age, this paper argues that divergence in household debt across countries is a function of the welfare state's orientation toward old-age provisions and the insider/outsider cleavage in the labor market. A welfare state that is generous toward the youth, facilitates the possibility for people to plan ahead in life and, by stabilizing financial expectations, makes people less risk averse. Higher debt ratios are more common in Northern countries as social protection is more extensive; while in continental countries, where welfare benefits are narrower and tend to target the already employed and the elderly, people are more riskaverse toward debt. The proposed theory is supported by an illustrative empirical analysis using data from the OECD SOCX, the Comparative Welfare Entitlements Dataset (CWED2) and the ECRI statistical package. Introduction: from a private trouble to a public issue Over the last 20 years, household debt relative to income has increased significantly in all Organization for Economic Cooperation and Development (OECD) countries, peaking around the 2007-2008 economic crisis. Since then, deleverage has been limited and, in many countries, household debt has continued to accumulate. Despite some common trends, the differences between countries remain significant. Before the crisis of 2008, household debt was considered a private trouble and received little sociological attention (Ritzer 2011). The crisis in the United States shifted the perception of household debt in the eyes of scholars and public institutions from a private to a public issue (Turner 2017). Personal debt has been seen as one of the leading causes of the crisis, not only because people were unable to repay their debts, but also because economic activity was absorbed in repaying any existing debts, thereby slashing growth (Jord a, Schularick, and Taylor 2015; Mian and Sufi 2015). Sociologists and political economists have begun investigating the relationship between credit and welfare spending. Many authors, especially Anglo-American scholars, argued that the rise of debt was the effect of welfare retrenchment or the lack of welfare protection (

show abstract

“…The need for the enhanced credit availability and fiscal discipline is pointed out as a counteraction for such consequences. The impact of private sector debt on GDP growth was critically evaluated by Barnes (2016) in the context of liberal growth model. She found no proof of private debt positive influence on GDP.…”

Section: Introductionmentioning

confidence: 99%

Panel Data Analysis of Public and Private Debt and House Price Influence on GDP in the European Union Countries

Snieška

Burksaitiene

2018

View full text Add to dashboard Cite

The panel data analysis of the influence of change in real public debt, real private debt, and deflated house prices on the GDP in selected European countries is performed. Least squares and autoregressive AR(p) model were used with crosssection and period both fixed by dummy variables. The research has confirmed strong negative influence of public debt with zero, one and two year's lags as an independent variable on the GDP as the dependent variable. This is not surprising having in mind limited functionality of the European central bank as a lender of the last resort for the countries of the monetary union, that is, for the most of the analysed countries. This finding also confirms the necessity of the transformation of the European Monetary Union to the European Financial Union. Private debt has definite positive influence on the GDP as the dependent variable. It was confirmed by measuring this influence with zero, one and two and three years lags, but this positive influence was 2-3 times lower than the negative influence of public debt on the GDP. House prices unlagged have similar absolute value of positive influence on the GDP coefficient as the absolute value of the negative influence of lagged public debt, according to the regression coefficients received. However, house prices, leading by 2 years, have negative influence on the GDP, but this influence is almost 5 times weaker than the negative influence of unlagged public debt.

show abstract

Private Debt and the Anglo-Liberal Growth Model

Cited by 5 publications

References 33 publications

Rethinking Comparative Political Economy

Rethinking Comparative Political Economy

The impact of welfare on household debt

Panel Data Analysis of Public and Private Debt and House Price Influence on GDP in the European Union Countries

Contact Info

Product

Resources

About