Working Paper: NBER ID: w25170
Authors: Gabriel Garber; Atif Mian; Jacopo Ponticelli; Amir Sufi
Abstract: Brazil experienced one of the most severe recessions in its history from 2014 to 2016. Following a pattern shown for previous economic downturns in other countries, the Brazilian recession was preceded by a substantial increase in household debt from 2003 to 2014. This study utilizes a novel individual level data set on household borrowing in order to provide details of the household debt boom. The data set allows for a decomposition of the rise in household debt by the type of debt and by the source of debt, and it allows for an analysis of the income of individuals taking on more debt during the boom. We conclude with an exploration of potential causes of the rise in household debt.
Keywords: Household Debt; Brazil; Recession; Credit Registry Data
JEL Codes: E32; F44
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Credit expansion (E51) | Rise in household debt (G51) |
| Government-controlled banks (G21) | Credit expansion after 2011 (E51) |
| Financial inclusion initiatives (G21) | Rise in household debt among lower-income individuals during 2003-2011 (G51) |
| Government-controlled banks focus on mortgage lending (G21) | Growth in debt less inclusive during 2011-2014 (F65) |
| Household debt increase from 2003 to 2014 (G51) | Severe recession in Brazil from 2015 to 2016 (N16) |