A change in the behavior of households, new form of moral hazard

The paper examines the relationship between growing household debts in developed
countries as based on statistical data available in the vast majority of rich countries, and
some other factors such as the development of household deposits, households’ net
financial assets, decrease in non-financial household assets etc. The main conclusion is
that the net household wealth in rich countries has been on the decline since the
beginning of the new millennium (though due to the differences between the countries we
are unable to draw a general conclusion valid for all). Excessive household consumption,
the economic crises and a drop in asset value will have contributed as well. However,
considering the current demographic trends and life expectancy, it would be more
appropriate if net household wealth increased in proportion to the future burden that
European families ought to expect as a consequence of their ever longer retirement.

Famalicao 2011 Fullpaper
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