Denmark > U.S. in Household Debt

U.S. lags some European countries in household leverage

February 9, 2010

Share:
  • Facebook
  • Twitter
  • Print
  • Email
  • Comment

real estate chartThe U.S. lags at least a few European countries when it comes to household leverage according to a study in the latest Economic Letter from the Federal Reserve Bureau of San Francisco. Since the US has been the poster child for consumer debt, their showing versus other industrialized nations is surprising – in fact, it’s Denmark who’s actually in the lead. The key to the trend seems to lie in the price of housing. The paper, called “Global Household Leverage, House Prices, and Consumption,” finds that household leverage in the United States and many other industrialized countries increased steeply in the decade prior to 2007 and those countries with the biggest increases saw housing prices rise the fastest during the same period. At the same time, those countries also experienced the biggest drops in household consumption once house prices started falling.

Canada is not on the list.

Read the full paper here:

http://www.frbsf.org/publications/economics/letter/2010/el2010-01.html

Add a Comment

Have your say on this topic! Comments that are thought to be disrespectful or offensive may be removed by our Canadian Investment Review admins. Thanks!

Transcontinental Media G.P.