Economist

Richard Iley

Macroeconomics

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<p>Household debt service ratios (DSRs) are a key metric of macro-economic risk and vulnerability. There is a mounting consenus amongst macro-economists that high and rising debt levels may boost short-term growth but they negatively impact medium-term performance.</p>
<p>DSRs are the key vector of transmission. Higher debt leads to higher DSRs, magnifying the impact of any policy tightening. Importantly, the impact of policy easing when debt is high may be asymmetric as highly indebted consumers prefer…</p>
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Household debt service ratios (DSRs) are a key metric of macro-economic risk and vulnerability. There is a mounting consenus amongst macro-economists that high and rising debt levels may boost short-term growth but they negatively impact medium-term performance.
DSRs are the key vector of transmission. Higher debt leads to higher DSRs, magnifying the impact of any policy tightening. Importantly, the impact of policy easing when debt is high may be asymmetric as highly indebted consumers prefer…


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