01791cas a2200265 a 4500 AALejournalIMF018724 230101c9999 xx r poo 0 0eng d 5.00 USD 9781484373866 1018-5941 BD-DhAAL BD-DhAAL Jones, Callum. Household Leverage and the Recession / Callum Jones, Virgiliu Midrigan, Thomas Philippon. Washington, D.C. : International Monetary Fund, 2018. 1 online resource (51 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students We evaluate and partially challenge the 'household leverage' view of the Great Recession. In the data, employment and consumption declined more in states where household debt declined more. We study a model where liquidity constraints amplify the response of consumption and employment to changes in debt. We estimate the model with Bayesian methods combining state and aggregate data. Changes in household credit limits explain 40 percent of the differential rise and fall of employment across states, but a small fraction of the aggregate employment decline in 2008-2010. Nevertheless, since household deleveraging was gradual, credit shocks greatly slowed the recovery. Mode of access: Internet Midrigan, Virgiliu. Philippon, Thomas. IMF Working Papers; Working Paper ; No. 2018/194 Full text available on IMF http://elibrary.imf.org/view/journals/001/2018/194/001.2018.issue-194-en.xml IMF e-Library