Overindebtedness in the prelude of the crises of 2016: An Empirical Contribution to the Brazilian Case
In Brazil, the expansion of access to credit by consumers has been an important factor that has given rise to new opportunities and new hardships, both for individuals and the macroeconomic scenario. With an increasing supply of credit by the Brazilian government to boost consumption, the proportion of the household income directed to the payment of debts became gradually higher, causing the indebtedness to become a more visible phenomenon. This paper aims to analyze which events imply higher or lower indebtedness of the Brazilian consumers in the prelude of the 2016 crisis. The results of our study show that when there is a birth or death of a family member, there is an increase in the probability of being indebted in six of nine proposed concepts of debt. Our results indicate that, even in the face of a crisis, the behavior of the consumers regarding the probability of being in debt does not change.
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