How Household Debt Contributes to Unemployment: Mian and Sufi
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Nov. 17 (Bloomberg) -- The weakness in household balancesheets and the associated pullback in spending are directlyresponsible for the lion’s share of employment losses in the U.S.economy. This deficiency remains the most significant impedimentto a robust recovery.
Our research suggests that 65 percent of the job lossesfrom 2007 to 2009 came from the drop in household spendinginduced by the collapse in home prices and its effect on ahighly levered household sector.