Abstract

GONZALEZ, Mario Alejandro  and  LEON, John Jairo. An analysis of household debt in Colombia. Desarro. soc. [online]. 2007, n.60, pp.127-154. ISSN 0120-3584.

This paper analyzes the key drivers of Colombian household's indebtedness during the past 14 years, using Financial Accounts provided by the Central Bank (Banco de la República) and a random sample of individuals Tax Income Statements reported to the Tax Office (DIAN) between 1993 and 2004. Based on a simple choice model, the results suggest that collateral and carried debt are the main drivers of indebtedness, in consequence policy should be household equity and interest rate oriented in order to avoid a massive default crisis such as the one ocurred in 1999.

Keywords : indebtedness; household balance sheet; credit rationing; dynamic data panel models.

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