Research Article
BibTex RIS Cite

The Rise of Household Debt in Global Economy and Türkiye

Year 2023, , 697 - 716, 30.12.2023
https://doi.org/10.26650/ISTJECON2023-1242692

Abstract

This paper investigates the rise of household debt and its impact on class relations and the sustainability of capitalism. The analysis begins with a historical perspective on the factors contributing to household debt growth, such as declining wages, increasing pressure on organized labor, and the need to maintain consumer demand in the face of declining profit margins. The paper then compares the dynamics of household debt across countries and examines Türkiye’s case in a global context. The findings suggest that unsustainable household debt levels, declining wages, and rising inequality; raise doubts about the long-term sustainability of capitalism as we know it. The paper advocates for rethinking economic policies and practices, prioritizing the well-being and prosperity of the majority.

JEL Classification : G51 , E31 , F34

References

  • Akçay, Ü. (2017). Finansallaşma, Merkez Bankası Politikaları ve Borcun ‘Özelleştirilmesi’. P. Bedirhanoğlu, Ö. Çelik & H. Mıhcı (Ed.), Finansallaşma Kıskacında Türkiye’de Devlet, Sermaye Birikimi ve Emek kitabı içinde (s. 45-80). İstanbul, Nota Bene Yayınları. google scholar
  • Albayrak, Ö. (2020). Household Consumption, Household Indebtedness, and Inequality in Turkey: A Microeconometric Analysis. Levy Economics Institute, Working Papers Series. google scholar
  • Applebaum, B. (2019). The Economists’ Hour: False Prophets, Free Markets, and the Fracture of Society. UK, Hachette. google scholar
  • Ashenfelter, O. C., Johnson, G. E., & Pencavel, J. H. (1972). Trade Unions and the Rate of Change of Money Wages in United States Manufacturing Industry. Review of Economic Studies, 39, 27-54. google scholar
  • Aslan, A., & Dincer, I. (2018). The Impact of Mortgage Loans on the Financialization Process in Turkey. Planlama, 28(2), 143-153. google scholar
  • Bağımsız Sosyal Bilimciler (BSB), (2015). AKP’li Yıllarda Emeğin Durumu. İstanbul: Yordam Kitap. google scholar
  • Bank of International Settlements, (2022, February 23). Total Credit to Households (core debt) as a Percentage of GDP. Retrieved from https://stats.bis.org/statx/srs/table/f3.1. google scholar
  • Biondi, M. (2006). To Stand and Fight. London: Harvard University Press. google scholar
  • Bohanon, C. (2012, August). Economic Recovery: Lessons from the Post-World War II Period. Mercatus on Policy, 112, 1-4. Retrieved from https://www.mercatus.org/system/files/PostWWII_ Recovery_Bohanon_MOP112-%281%29-copy.pdf . google scholar
  • Catanzaro, M. (2020, April 21). A Snapshot of Record-High U.S. Household Debt. Federal Reserve Bank of St. Louis. Retrieved from https://www.stlouisfed.org/open-vault/2020/april/snapshot-record-high-household-debt. google scholar
  • Cohen, L. (2004). A Consumers’ Republic: The Politics of Mass Consumption in Postwar America. Journal of Consumer Research, 31(1), 236-239. google scholar
  • CPEC (2013). The Overindebtedness of European Households: Updated Mapping of the Situation, Nature and Causes, Effects and Initiatives for Alleviating Its Impact. Final Report, Part 1. Berlin: Civic Consulting of the Consumer Policy Evaluation Consortium. Available at: https://ec.europa. eu/info/sites/default/files/final-report-on-over-indebtedness-of-european-households-synthesis-of-findings_december2013_en.pdf google scholar
  • Davutyan, N., & Öztürkkal, B. (2016). Determinants of Saving-Borrowing Decisions and Financial Inclusion in a High Middle Income Country: The Turkish Case. Emerging Markets Finance and Trade, 52(11), 2512-2529. google scholar
  • De Vita, G., & Luo, Y. (2020). Financialization, Household Debt and Income Inequality: Empirical Evidence. International Journal of Finance & Economics, 26, 1917-1937. google scholar
  • Engels, F., & Marx, K. (2004 [1848]). The Communist Manifesto. UK: Penguin. google scholar
  • Fernald, J. G. (2016). Reassessing Longer-Run U.S. Growth: How Low?. Federal Reserve Bank of San Francisco Working Paper 2016-18. google scholar
  • Flanagan, R. (1976). Wage Interdependence in Unionized Labor Markets. Brookings Papers on Economic Activities, 3, 635-681. google scholar
  • Ford, J. (2018). The Indebted Society: Credit and Default in the 1980s. London: Routledge. google scholar
  • FRED, (2022, February 23). Retrieved from https://fred.stlouisfed.org/series/W270RE1A156NBEA. google scholar
  • FRED, (2022, February 23). Retrieved from https://fred.stlouisfed.org/series/DPCERE1Q156NBEA. google scholar
  • FRED, (2022, February 22). Retrieved from https://fred.stlouisfed.org/series/UNRATE. google scholar
  • FRED, (2022, February 22).Retrieved from https://fred.stlouisfed.org/series/DFF. google scholar
  • Freeman, R. B., & Medoff. J. L. (1984). What Do Unions Do?. New York. Basic Books. google scholar
  • Hibbs, D. A. (1977). Trade Union Power, Labor Militancy and Wage Inflation: A Comparative Analysis. Center for International Studies, Massachusetts Institute of Technology, Departmant of Government, Cambridge. google scholar
  • Hiilamo, H. (2018). Household Debt and Economic Crises. UK: Edward Elgar Publishing. google scholar IMF(2023, November, 30)https://data.imf.org/?sk=388dfa60-1d26-4ade-b505-a05a558d9a42 google scholar
  • Karaçimen, E. (2014). Financialization in Turkey: The Case of Consumer Debt. Journal of Balkan and Near Eastern Studies, 16(2), 161-180. google scholar
  • Karaçimen, E. (2015). Interlinkages Between Credit, Debt and the Labour Market: Evidence from Turkey. Cambridge Journal of Economics, 39(3), 751-767. google scholar
  • Karaçimen, E., & Çelik, Ö. (2017). Türkiye’de Gayrimenkul ve Finansın Derinleşen ve Yeniden Yapılanan İlişkisi. Bedirhanoğlu, Pınar (Ed.), Finansallaşma Kıskacında Türkiye’de Devlet, Sermaye Birikimi ve Emek kitabı içinde (s. 83-103), İstanbul: Nota Bene Yayınları. google scholar
  • Karakurum-Ozdemir, K., Kokkizil, M. & Uysal, G. (2019). Financial Literacy in Developing Countries. Social Indicators Research, 143, 325-353. https://doi.org/10.1007/s11205-018-1952-x google scholar
  • Keys, B., Mukherjee, T., Seru, A., & Vig, V. (2008). Securitization and Screening: Evidence from Subprime Mortgage Backed Securities. Quarterly Journal of Economics, 125(1), 307-362. google scholar
  • Klein, M. (2016, June 16). Why is the Netherlands doing so badly?. Financial Times. Retrieved from https://www.ft.com/content/7a3f30dd-51ff-38c1-8a1a-bf0d8140f19f. google scholar
  • Lattanzi-Silveus, L. (2019). Consumer Finance and Labor Exploitation. Review of Radical Political Economics, 51(1), 95-110. google scholar
  • Lin, K. H., & Tomaskovic-Devey, D. (2013). Financialization and US Income Inequality, 1970-2008. American Journal of Sociology, 118(5), 1284-1329. google scholar
  • Mayer, G. (2004). Union Membership Trends in the United States. CRS Report for Congress. Retrieved from https://sgp.fas.org/crs/misc/RL32553.pdf. google scholar
  • Mbaye, S., Moreno-Badia, M., & Chae, K. (2018). Global Debt Database: Methodology and Sources. IMF Working Paper 18/111. International Monetary Fund, Washington, DC. google scholar
  • Mishel, L., Gould, E., & Bivens, J. (2015). Wage Stagnation in Nine Charts. Economic Policy Institute, 2-13. Retrieved from https://termadiary.org/wp-content/uploads/2017/05/wage-stagnation-in-nine-charts.pdf. google scholar
  • Moore, G. M., & Hedges, J. N. (1971). Trends in Labor and Leisure. Monthly Labor Review, 94(2), 3-11. google scholar
  • Morgan, B. (2019, January 02). NOwnership, No Problem: An Updated Look at Why Millennials Value Experiences Over Owning Things. Forbes: Retrieved from https://www.forbes.com/sites/ blakemorgan/2019/01/02/nownership-no-problem-an-updated-look-at-why-millennials-value-experiences-over-owning-things/?sh=2aaf26a5522f. google scholar
  • Moseley, F. (1997). The Rate of Profit and the Future of Capitalism. Review of Radical Political Economics, 29(4), 23-41. google scholar
  • OECD (2021). Brick by Brick: Building Better Housing Policies. OECD Publishing, Paris. Retrieved from https://stat.link/jyazup. google scholar
  • Öztay, H. (2021). Değişen Tüketim Pratikleri Bağlamında Hızlı Moda. İstanbul Gelişim Üniversitesi Sosyal Bilimler Dergisi, 8(2), 468-481. google scholar
  • Parsley, C. J. (1980). Labor Union Effects on Wage Gains: A Survey of Recent Literature. Journal of Economic Literature, 18, 1-31. google scholar
  • Rojas, Y. (2022). Financial Indebtedness and Suicide: A 1-year Follow-up Study of a Population Registered at the Swedish Enforcement Authority. International Journal of Social Psychiatry, 68(7), 1445-1453. 10.1177/00207640211036166 google scholar
  • The Banks Association of Turkey (2022, February 23). Consumer Loans and Housing Loans. Retrieved from https://www.tbb.org.tr/en/banks-and-banking-sector-information/statistical-reports/20. google scholar
  • Turunen, E., & Hiilamo, H. (2014). Health Effects of Indebtedness: A Systematic Review. BMC Public Health, 14(1), 1-8. google scholar
  • Türel, O. (2011). Geç Barbarlık Çağı 2: Planlama, Kurumsal Yapıda Dönüşüm ve Sanayileşme. İstanbul: Yordam Kitap. google scholar
  • TURKSTAT (2022, February 23). Labour Force Statistics. Retrieved from https://data.tuik.gov.tr/ Kategori/GetKategori?p=Istihdam,-Issizlik-ve-Ucret-108. google scholar
  • Warth, J., Puth, M. T., Tillmann, J., Porz, J., Zier, U., Weckbecker, K., & Münster, E. (2019). Over-Indebtedness and Its Association with Pain and Pain Medication Use. Preventive Medicine Reports, 16, 100987. https://doi.org/10.1016/j.pmedr.2019.100987 google scholar
Year 2023, , 697 - 716, 30.12.2023
https://doi.org/10.26650/ISTJECON2023-1242692

Abstract

Supporting Institution

destekleyen kurum yoktur.

References

  • Akçay, Ü. (2017). Finansallaşma, Merkez Bankası Politikaları ve Borcun ‘Özelleştirilmesi’. P. Bedirhanoğlu, Ö. Çelik & H. Mıhcı (Ed.), Finansallaşma Kıskacında Türkiye’de Devlet, Sermaye Birikimi ve Emek kitabı içinde (s. 45-80). İstanbul, Nota Bene Yayınları. google scholar
  • Albayrak, Ö. (2020). Household Consumption, Household Indebtedness, and Inequality in Turkey: A Microeconometric Analysis. Levy Economics Institute, Working Papers Series. google scholar
  • Applebaum, B. (2019). The Economists’ Hour: False Prophets, Free Markets, and the Fracture of Society. UK, Hachette. google scholar
  • Ashenfelter, O. C., Johnson, G. E., & Pencavel, J. H. (1972). Trade Unions and the Rate of Change of Money Wages in United States Manufacturing Industry. Review of Economic Studies, 39, 27-54. google scholar
  • Aslan, A., & Dincer, I. (2018). The Impact of Mortgage Loans on the Financialization Process in Turkey. Planlama, 28(2), 143-153. google scholar
  • Bağımsız Sosyal Bilimciler (BSB), (2015). AKP’li Yıllarda Emeğin Durumu. İstanbul: Yordam Kitap. google scholar
  • Bank of International Settlements, (2022, February 23). Total Credit to Households (core debt) as a Percentage of GDP. Retrieved from https://stats.bis.org/statx/srs/table/f3.1. google scholar
  • Biondi, M. (2006). To Stand and Fight. London: Harvard University Press. google scholar
  • Bohanon, C. (2012, August). Economic Recovery: Lessons from the Post-World War II Period. Mercatus on Policy, 112, 1-4. Retrieved from https://www.mercatus.org/system/files/PostWWII_ Recovery_Bohanon_MOP112-%281%29-copy.pdf . google scholar
  • Catanzaro, M. (2020, April 21). A Snapshot of Record-High U.S. Household Debt. Federal Reserve Bank of St. Louis. Retrieved from https://www.stlouisfed.org/open-vault/2020/april/snapshot-record-high-household-debt. google scholar
  • Cohen, L. (2004). A Consumers’ Republic: The Politics of Mass Consumption in Postwar America. Journal of Consumer Research, 31(1), 236-239. google scholar
  • CPEC (2013). The Overindebtedness of European Households: Updated Mapping of the Situation, Nature and Causes, Effects and Initiatives for Alleviating Its Impact. Final Report, Part 1. Berlin: Civic Consulting of the Consumer Policy Evaluation Consortium. Available at: https://ec.europa. eu/info/sites/default/files/final-report-on-over-indebtedness-of-european-households-synthesis-of-findings_december2013_en.pdf google scholar
  • Davutyan, N., & Öztürkkal, B. (2016). Determinants of Saving-Borrowing Decisions and Financial Inclusion in a High Middle Income Country: The Turkish Case. Emerging Markets Finance and Trade, 52(11), 2512-2529. google scholar
  • De Vita, G., & Luo, Y. (2020). Financialization, Household Debt and Income Inequality: Empirical Evidence. International Journal of Finance & Economics, 26, 1917-1937. google scholar
  • Engels, F., & Marx, K. (2004 [1848]). The Communist Manifesto. UK: Penguin. google scholar
  • Fernald, J. G. (2016). Reassessing Longer-Run U.S. Growth: How Low?. Federal Reserve Bank of San Francisco Working Paper 2016-18. google scholar
  • Flanagan, R. (1976). Wage Interdependence in Unionized Labor Markets. Brookings Papers on Economic Activities, 3, 635-681. google scholar
  • Ford, J. (2018). The Indebted Society: Credit and Default in the 1980s. London: Routledge. google scholar
  • FRED, (2022, February 23). Retrieved from https://fred.stlouisfed.org/series/W270RE1A156NBEA. google scholar
  • FRED, (2022, February 23). Retrieved from https://fred.stlouisfed.org/series/DPCERE1Q156NBEA. google scholar
  • FRED, (2022, February 22). Retrieved from https://fred.stlouisfed.org/series/UNRATE. google scholar
  • FRED, (2022, February 22).Retrieved from https://fred.stlouisfed.org/series/DFF. google scholar
  • Freeman, R. B., & Medoff. J. L. (1984). What Do Unions Do?. New York. Basic Books. google scholar
  • Hibbs, D. A. (1977). Trade Union Power, Labor Militancy and Wage Inflation: A Comparative Analysis. Center for International Studies, Massachusetts Institute of Technology, Departmant of Government, Cambridge. google scholar
  • Hiilamo, H. (2018). Household Debt and Economic Crises. UK: Edward Elgar Publishing. google scholar IMF(2023, November, 30)https://data.imf.org/?sk=388dfa60-1d26-4ade-b505-a05a558d9a42 google scholar
  • Karaçimen, E. (2014). Financialization in Turkey: The Case of Consumer Debt. Journal of Balkan and Near Eastern Studies, 16(2), 161-180. google scholar
  • Karaçimen, E. (2015). Interlinkages Between Credit, Debt and the Labour Market: Evidence from Turkey. Cambridge Journal of Economics, 39(3), 751-767. google scholar
  • Karaçimen, E., & Çelik, Ö. (2017). Türkiye’de Gayrimenkul ve Finansın Derinleşen ve Yeniden Yapılanan İlişkisi. Bedirhanoğlu, Pınar (Ed.), Finansallaşma Kıskacında Türkiye’de Devlet, Sermaye Birikimi ve Emek kitabı içinde (s. 83-103), İstanbul: Nota Bene Yayınları. google scholar
  • Karakurum-Ozdemir, K., Kokkizil, M. & Uysal, G. (2019). Financial Literacy in Developing Countries. Social Indicators Research, 143, 325-353. https://doi.org/10.1007/s11205-018-1952-x google scholar
  • Keys, B., Mukherjee, T., Seru, A., & Vig, V. (2008). Securitization and Screening: Evidence from Subprime Mortgage Backed Securities. Quarterly Journal of Economics, 125(1), 307-362. google scholar
  • Klein, M. (2016, June 16). Why is the Netherlands doing so badly?. Financial Times. Retrieved from https://www.ft.com/content/7a3f30dd-51ff-38c1-8a1a-bf0d8140f19f. google scholar
  • Lattanzi-Silveus, L. (2019). Consumer Finance and Labor Exploitation. Review of Radical Political Economics, 51(1), 95-110. google scholar
  • Lin, K. H., & Tomaskovic-Devey, D. (2013). Financialization and US Income Inequality, 1970-2008. American Journal of Sociology, 118(5), 1284-1329. google scholar
  • Mayer, G. (2004). Union Membership Trends in the United States. CRS Report for Congress. Retrieved from https://sgp.fas.org/crs/misc/RL32553.pdf. google scholar
  • Mbaye, S., Moreno-Badia, M., & Chae, K. (2018). Global Debt Database: Methodology and Sources. IMF Working Paper 18/111. International Monetary Fund, Washington, DC. google scholar
  • Mishel, L., Gould, E., & Bivens, J. (2015). Wage Stagnation in Nine Charts. Economic Policy Institute, 2-13. Retrieved from https://termadiary.org/wp-content/uploads/2017/05/wage-stagnation-in-nine-charts.pdf. google scholar
  • Moore, G. M., & Hedges, J. N. (1971). Trends in Labor and Leisure. Monthly Labor Review, 94(2), 3-11. google scholar
  • Morgan, B. (2019, January 02). NOwnership, No Problem: An Updated Look at Why Millennials Value Experiences Over Owning Things. Forbes: Retrieved from https://www.forbes.com/sites/ blakemorgan/2019/01/02/nownership-no-problem-an-updated-look-at-why-millennials-value-experiences-over-owning-things/?sh=2aaf26a5522f. google scholar
  • Moseley, F. (1997). The Rate of Profit and the Future of Capitalism. Review of Radical Political Economics, 29(4), 23-41. google scholar
  • OECD (2021). Brick by Brick: Building Better Housing Policies. OECD Publishing, Paris. Retrieved from https://stat.link/jyazup. google scholar
  • Öztay, H. (2021). Değişen Tüketim Pratikleri Bağlamında Hızlı Moda. İstanbul Gelişim Üniversitesi Sosyal Bilimler Dergisi, 8(2), 468-481. google scholar
  • Parsley, C. J. (1980). Labor Union Effects on Wage Gains: A Survey of Recent Literature. Journal of Economic Literature, 18, 1-31. google scholar
  • Rojas, Y. (2022). Financial Indebtedness and Suicide: A 1-year Follow-up Study of a Population Registered at the Swedish Enforcement Authority. International Journal of Social Psychiatry, 68(7), 1445-1453. 10.1177/00207640211036166 google scholar
  • The Banks Association of Turkey (2022, February 23). Consumer Loans and Housing Loans. Retrieved from https://www.tbb.org.tr/en/banks-and-banking-sector-information/statistical-reports/20. google scholar
  • Turunen, E., & Hiilamo, H. (2014). Health Effects of Indebtedness: A Systematic Review. BMC Public Health, 14(1), 1-8. google scholar
  • Türel, O. (2011). Geç Barbarlık Çağı 2: Planlama, Kurumsal Yapıda Dönüşüm ve Sanayileşme. İstanbul: Yordam Kitap. google scholar
  • TURKSTAT (2022, February 23). Labour Force Statistics. Retrieved from https://data.tuik.gov.tr/ Kategori/GetKategori?p=Istihdam,-Issizlik-ve-Ucret-108. google scholar
  • Warth, J., Puth, M. T., Tillmann, J., Porz, J., Zier, U., Weckbecker, K., & Münster, E. (2019). Over-Indebtedness and Its Association with Pain and Pain Medication Use. Preventive Medicine Reports, 16, 100987. https://doi.org/10.1016/j.pmedr.2019.100987 google scholar
There are 48 citations in total.

Details

Primary Language English
Subjects Business Administration
Journal Section Research Article
Authors

Murat Birdal 0000-0001-7554-0560

Serdar Acun 0000-0001-7627-9894

Parla Onuk 0000-0003-0475-8284

Publication Date December 30, 2023
Submission Date January 26, 2023
Published in Issue Year 2023

Cite

APA Birdal, M., Acun, S., & Onuk, P. (2023). The Rise of Household Debt in Global Economy and Türkiye. İstanbul İktisat Dergisi, 73(2), 697-716. https://doi.org/10.26650/ISTJECON2023-1242692
AMA Birdal M, Acun S, Onuk P. The Rise of Household Debt in Global Economy and Türkiye. İstanbul İktisat Dergisi. December 2023;73(2):697-716. doi:10.26650/ISTJECON2023-1242692
Chicago Birdal, Murat, Serdar Acun, and Parla Onuk. “The Rise of Household Debt in Global Economy and Türkiye”. İstanbul İktisat Dergisi 73, no. 2 (December 2023): 697-716. https://doi.org/10.26650/ISTJECON2023-1242692.
EndNote Birdal M, Acun S, Onuk P (December 1, 2023) The Rise of Household Debt in Global Economy and Türkiye. İstanbul İktisat Dergisi 73 2 697–716.
IEEE M. Birdal, S. Acun, and P. Onuk, “The Rise of Household Debt in Global Economy and Türkiye”, İstanbul İktisat Dergisi, vol. 73, no. 2, pp. 697–716, 2023, doi: 10.26650/ISTJECON2023-1242692.
ISNAD Birdal, Murat et al. “The Rise of Household Debt in Global Economy and Türkiye”. İstanbul İktisat Dergisi 73/2 (December 2023), 697-716. https://doi.org/10.26650/ISTJECON2023-1242692.
JAMA Birdal M, Acun S, Onuk P. The Rise of Household Debt in Global Economy and Türkiye. İstanbul İktisat Dergisi. 2023;73:697–716.
MLA Birdal, Murat et al. “The Rise of Household Debt in Global Economy and Türkiye”. İstanbul İktisat Dergisi, vol. 73, no. 2, 2023, pp. 697-16, doi:10.26650/ISTJECON2023-1242692.
Vancouver Birdal M, Acun S, Onuk P. The Rise of Household Debt in Global Economy and Türkiye. İstanbul İktisat Dergisi. 2023;73(2):697-716.