A Comparative Study On The Debts Of Chinese And American Residents

The research object of this study is household debt.In this doctoral thesis,the definition of 'household debt' is redefined,and its characteristics were studied.Determinants affecting the accumulation of household debt and the impacts of household debt on economy were analyzed based on the comparative analysis between China and the United States.Firstly,this study researched the questions of the household debt participation rate,the amount of debt and debt burden under different ages,incomes,assets,and education levels from the micro-aspect.According to the stylized facts and the empirical test of the micro survey data(CHFS2015 and SCF2016)of China and the United States,it was found that people usually experience a process of borrowing money for consumption and saving money for repayment with people growing older.In the United States,the household debt participation rate and the amount of household debt showed inverted U-shaped characteristics.While in China,the amount of debt is negatively related to age,which is because Chinese people usually prefer to buy houses at a younger age.In China and the U.S.,the debt participation rate and the amount of debt will increase along with the increase of household incomes,assets,and education level.However,unlike the U.S.,social capital is also a crucial determinant in China as money borrowing between friends and families is very common.Therefore,the relationship between households' assets and their debt participation rate is not significant in China.Moreover,those people who are married,own jobs,and have houses had a higher debt participation rate and more debt.Secondly,this study reviewed the history of household debt and studied the factors which influence its accumulation in both countries from the macro-aspect.This study finds that financial deregulation always appears during the upward period of the households' leverage rate.The high growth speed of real GDP,the high nominal growth caused by high inflation,and the spontaneous debt cut of the household after the crisis all lead to the decrease of the leverage ratio of the household.Based on the macro data of household debt in China and the U.S.,it was found that household debt is positively correlated with household's income and house price,negatively correlated with the aging rate and loan interest rate.Thirdly,this study analyzed the mechanism and the effect of household debt on economic growth.After the 1980 s,the driving force of the U.S.economy has changedfrom "saving-investment" to "borrowing-consumption." As household debt could enlarge the income gap,it is difficult for America to get rid of the debt-driven economic growth mode.Household debt will promote economic growth through the "multiplier-accelerator mechanism" and restrain economic growth through the "debt service transfer mechanism." And the "threshold effect" is existed in household debt's influence on economic growth,using international data and the panel threshold model,it's found that the abrupt change point of the household's leverage ratio is 47.4%.Finally,this study constructed a debt crisis analysis framework that can be used in the household sector.Drawing on "financial instability hypothesis" and "balance sheet recession hypothesis",two new hypotheses are proposed in this paper.The first one,due to the existence of "safety margin",with the influence of optimism and pessimism,the actual amount of debt will deviate from the optimal amount of debt.The amount which is used to adjust to the optimal amount of debt is “too much”.The second one,Utility function of household is a segment function about the state of debt.When household holds excessive debt,debt has a negative impact on utility.The time which is used to adjust to the optimal amount of debt is “too short”.With the slowdown in Chinese economic growth,under the influence of continuous debt accumulation,when there is a sudden sharp slowdown in economic growth,households will have to reduce their debts because of their lower expected income.Based on the above hypotheses,household reduce their debt “too much” in a “too short” time.It will lead to a further shortage of effective demand and make the economy falls into a long-term recession.In this case,even if we keep the bottom line,without the systemic financial crisis and the asset bubble bursts,we may also fall into the crisis of "Debt Overhang Recession".