Affiliations: [a] University of Eastern Finland, Finland | [b] European Central Bank, Frankfurt am Main, Germany
Correspondence:
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Corresponding author: Ilja Kristian Kavonius, European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany. Tel.: +49 69 1344 8417; Mobile: +49 171 443 5820; E-mail:ilja_kristian.kavonius@ecb.europa.eu
Abstract: Since 2008, when the U.S. subprime mortgage crisis triggered the financial
crisis, financial stability analysis has been increasingly interested in the
leverage and indebtedness of households along with the vulnerability of
different household groups. The reason for this interest is that the
household balance sheet and thus, also their risks, are typically
counterparts of those of financial institutions. Moreover, several reports,
for example the IMF/FSB report to the G-20 Finance Ministers and Central
Bank Governors concerning data gaps, emphasise the need for household data
which is broken down by different household types. However, none of the
reports specify how, in practice, the accounts should be used. This article uses the micro-macro linkage of wealth and income accounts and
thus creates a set of macroeconomic wealth accounts broken down by household
groups, using micro data available at the national level. The aim of the
project is to derive a framework where indebtedness indicators can be
optimally estimated in a timely manner and at a quarterly frequency. This
article makes the first attempt to estimate annual time series by using
historic micro-macro linkage and highlights problems related to time series
estimation and suggests how these estimations could be developed further.
Keywords: Wealth distribution, income distribution, wealth survey, national accounts, balance sheets, micro-macro link, indebtedness, household debt, household leverage
