Exploring the Roots and Impacts of Household Debt in Australia

Ing. Amir Shikhaliyev

Master's thesis

Abstract:

This dissertation investigates the dynamics of household debt in Australia from 2003 to 2022, focusing on the relationship between household debt and house prices. Utilizing Ordinary Least Squares (OLS) and Vector Autoregression (VAR) methodologies, the study explores demand- and supply-side factors influencing debt accumulation. Comprehensive datasets from the Australian Bureau of Statistics and the Reserve Bank of Australia are analyzed. Findings highlight significant roles of Inflation, Change in lending rates and changes in call rate in driving household debt. The research underscores the need for balanced economic policies to manage debt sustainably, providing valuable insights for policymakers and financial regulators.

Abstract:

This dissertation investigates the dynamics of household debt in Australia from 2003 to 2022, focusing on the relationship between household debt and house prices. Utilizing Ordinary Least Squares (OLS) and Vector Autoregression (VAR) methodologies, the study explores demand- and supply-side factors influencing debt accumulation. Comprehensive datasets from the Australian Bureau of Statistics and the Reserve Bank of Australia are analyzed. Findings highlight significant roles of Inflation, Change in lending rates and changes in call rate in driving household debt. The research underscores the need for balanced economic policies to manage debt sustainably, providing valuable insights for policymakers and financial regulators.

Keywords

Household debt, Australia, VAR analysis, Demand driven debt, Supply driven debt

Language used: English

Date on which the thesis was submitted / produced: 13. 5. 2024

Thesis defence

• Date of defence: 24. 6. 2024
• Supervisor: doc. Ing. Jan Čapek, Ph.D.
• Reader: Mgr. Jakub Chalmovianský, Ph.D.

Masaryk University

Faculty of Economics and Administration

Master programme / field:
Economics / Economics