Understanding debt, inequality and consumption behavior: The U.S. in the 2000s
The level of private debt in the U.S. economy rose considerably during the 2000s. This research will investigate how much of that increase was due to the weak job growth of that decade. If the debt run-up was due to consumers’ borrowing to cover necessities after a job loss, the policy implications are quite different than if it were due to reckless consumer spending. This research will also look at how debt was distributed across the population by age, race, and income, and how that distribution changed during the 2000s. A better understanding of the causes of increased debt and knowing who increased their debt load the most will help us better understand the importance of savings and the relationship between consumer demand and economic growth.