Credit shocks hit GDP harder in more equal countries – CNB study
Effects more severe in economies with lower income gaps, but redistribution can cushion blow
The adverse effect of rising household debt on GDP is greater in countries with lower levels of inequality, a study by the Czech National Bank suggests. This, the authors say, reflects broader credit-market participation among low-income households in these economies than in countries with greater levels of inequality.
In their paper, published on October 5, Michal Škára and Ladislava Issever Grochová use a panel dataset covering 36 countries from 1980 to 2023 to assess whether providing
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