Time-varying influence of household debt on inequality in United Kingdom

Edmond Berisha, David Gabauer, Rangan Gupta, Chi Keung Marco Lau

Research output: Contribution to journalArticlepeer-review

4 Scopus citations


The United Kingdom (UK) in terms of income inequality is ranked among the highest in Europe. Likewise, within the last four decades, UK is characterized with drastic increases in household debt. In this paper, we analyze time-varying predictability of growth in household debt for growth in income (and consumption) inequality based on a high-frequency (quarterly) data set over 1975:Q2 to 2016:Q1. Results indicate that the growth in household debt has a strong predictive power, both for within and out-of-samples, on growth rate of income (and consumption) inequality in the UK. Interestingly, the strength of the predictive power is found to have increased after 2008. Based on time-varying impulse response functions, we also find that higher growth rate in household debt corresponds with subsequent increases in income inequality.

Original languageEnglish
Pages (from-to)1917-1933
Number of pages17
JournalEmpirical Economics
Issue number4
StatePublished - Oct 2021


  • Household debt
  • Inequality
  • Time-varying predictions


Dive into the research topics of 'Time-varying influence of household debt on inequality in United Kingdom'. Together they form a unique fingerprint.

Cite this