Determinants of household debt in the EU

Household debt accumulated in the last few decades achieved in Europe and also in other parts of the world such a level that it still significantly affects the behaviour of individual national economies. The purpose of this work is to comprehensively describe the issue so that it was obvious the whole story. In particular we will focus first on the causes of household debt in terms of supply and demand . Here is discussed the influence of institutional and social factors that are at existing research proved significant. These include the possibility of sharing information on borrowers in credit registers , the development of financial products , over-optimism in consumption , consumption patterns , etc. The thesis continues with an analysis of the impact of debt on household consumption , which can be seen as a logical consequence of debt. Specifically, we mean consumption growth through additional finance (debt leverage) and potential drastic reduction in consumption in the case of over-indebtedness and the subsequent process of deleveraging households . Another part builds on the hypothesis obtained in the descriptive section so that confronts them with statistical data on the evolution of debt and consumption. Firstly in broader terms throughout the EU and subsequently in more detail in the case of a few selected countries in presented hypotheses are tested. The last section concludes and tests described determinants of debt and evaluates their explanatory power.