Economics
  • ISSN: 2155-7950
  • Journal of Business and Economics

Determinants of Malaysia Household Debt: Macroeconomic Perspective

 
 
Nurhuda Bt Nizar, Zulkefly Abdul Karim
(Universiti Kebangsaan Malaysia, Malaysia)
 
 
Abstract: Malaysia household debt to Gross Domestic Product (GDP) has increased to 86.6% at the end of 2013 compared to the previous year at 75.8% in 2010. This current study employs an autoregressive distributed lag model (ARDL) in examining the determinants of Malaysia household debt through classifying as consumer debt and mortgage debt. This study is using quarterly data over the period April 1996 to April 2013 for the six variables such as Gross Domestic Product (GDP), Consumer Price Index (CPI), Housing Price Index (HPI), interest rate, consumption and personal disposable income in modelling the determinants of household debt. The result shows that GDP was significantly contributing to the higher consumer debt and mortgage debt. This finding indicates that, the higher GDP, in which reflected a positive economic growth and directly in the higher earning become a proven theory for the two parties in taking and issuing more debt.
 
 
Key word: household debt; secured debt; unsecured debt; ARDL
 
JEL code: G




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