Higher Debt, Higher Growth: A short history of debt accumulation in Europe

In the 1980s, Europeans became hooked on debt to afford their lifestyle. Bank loans, a range of mortgages and credit cards became a necessity.The debt fueled economy produced one of the most spectacular economic crashes ever seen. However, policy makers still believe that more consumer credit is the only solution to the crisis, even though it generates instability over future debt repayment.

Scope

  • Uses statistical analysis to predict the impact of expanded consumer credit on the manufacturing sector in Europe.
  • Understand how Europeans have accumulated debt and the impact this has had on the region's economies.
  • Analyzes the potential impact quantitative easing may have on the output levels of the euro area economy, including within the manufacturing industry.
  • Compares Europe's debt accumulation to that of Japan and the US

Reasons to buy

Should developed economies become highly dependent on consumer credit to expand?

Is the manufacturing sector benefiting from Quantitative Easing (QE)?

Companies mentioned

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Table of Contents

OVERVIEW

Catalyst

Summary

HIGHER DEBT, HIGHER GROWTH

Europe's unsustainable addiction to credit

Following the Japanese

Credit addiction came from the US

IS THERE A WAY ...

OVERVIEW

Catalyst

Summary

HIGHER DEBT, HIGHER GROWTH

Europe's unsustainable addiction to credit

Following the Japanese

Credit addiction came from the US

IS THERE A WAY TO TACKLE THE GENERALIZED SLOWDOWN IN ACTIVITY?

Get the manufacturing sector going again

Measures to boost the availability of liquidity within the system: QE approach

No early signs of recovery. More credit is needed.

The original version of Quantitative Easing

CONCLUSIONS

The Euro area economy needs a deep rebalancing

APPENDIX

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