What explains the steep rise in household debt across OECD (Organisation for Economic Cooperation and Development) countries and how does this vary across country? To what extent do trends in the labour share, gross disposable income and consumption map onto these changes in household debt?

This report, authored by Dr Joe Chrisp, reviews existing literature on the nature and dynamics of household debt and analyses trends in the types of debt acquired across countries. The role of the housing market in driving the acquisition of household debt is critical but this does not preclude its role in shaping incomes and consumption. The report ends on a brief discussion of alternative ways to stimulate aggregate demand in place of a reliance on housing and household debt.