The relationship between debt and income is an indicator in the stability for households to face certain external shocks. A large debt to income will be costly if interest rates are high. This thesis will analyze the relationship between other economic factors regarding debt to income. Since monetary policy affects inflation and interest rates, analyzing their relationship with debt to income will give insight how they correlate. By using quarterly data over a period between 1987 and 2022, the regression model shows the largest positive correlation is between debt to income and house prices. Where inflation and unemployment have the two weakest correlation, both are negative, however, inflation becomes acceleration in inflation due to the transformationin percent. This meansthat the effect is displaying acceleration growth rather than one unit change.The negative relationship will result in a deceleration of growth regarding debt to income due to an increase in inflation which according to our study has a positive impact on the stability of the mortgage market in the short run.
| Identifer | oai:union.ndltd.org:UPSALLA1/oai:DiVA.org:hj-59240 |
| Date | January 2022 |
| Creators | Aras, Jack, Bäck, Olof |
| Publisher | Jönköping University, Internationella Handelshögskolan |
| Source Sets | DiVA Archive at Upsalla University |
| Language | English |
| Detected Language | English |
| Type | Student thesis, info:eu-repo/semantics/bachelorThesis, text |
| Format | application/pdf |
| Rights | info:eu-repo/semantics/openAccess |
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