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A cause for policy concern: the expansion of household credit in middle-income economies

dos Santos, Paulo (2013) 'A cause for policy concern: the expansion of household credit in middle-income economies.' International Review of Applied Economics, 27 (3).

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Abstract

This article discusses the significance of the recent growth in household credit across a range of middle-income economies. This growth is understood primar- ily as a result of policy, including the promotion of individual borrowing as a means to fund access to housing, education and health. A formal model of credit extension and allocation is developed, establishing that consumption lend- ing makes a comparatively stronger contribution to aggregate pro␣tability as well as ␣nancial fragility than production lending. Consumption lending may be understood to create distinctive endogenous tendencies to credit-market instabil- ity. The ␣ndings point to the need for a critical reconsideration of reliance on this lending for social and macroeconomic policy.

Item Type: Articles
SOAS Departments & Centres: Faculty of Law and Social Sciences > Department of Economics
DOI (Digital Object Identifier): 10.1080/02692171.2012.721755
Depositing User: Paulo dos Santos
Date Deposited: 18 Oct 2012 15:26
URI: http://eprints.soas.ac.uk/id/eprint/14500

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