Household debt and economic growth in Asia Pacific / Fatin Nadira Roslim

Household debt does give impact towards the growth of economic. Higher in household debt is deemed to be at worrying stage as it could turn out lead to another financial crisis. Therefore, the study aims to investigate the relationship between household debt on economic growth in selected Asia Pacific countries. The variables used in this study including Household Debt (HD), Consumption (C ), Labor Force (LF), Gross Capital Formation (GCF), Unemployment Rate (U ) and Household Saving as independent variables and Gross Domestic Product (GDP) as dependent variable. Moreover, the study utilized the theory of Solow Growth Model to estimate the regression.

The result show that household debt, labour force and gross capital formation are significantly affect the GDP. From the result, household debt and gross capital formation indicates a positive significant relationship while labour force shows negative significant relationship towards GDP. However, consumption, unemployment rate and household saving reveals insignificant relationship to GDP. These results further understanding the relationship between household debt on economic growth and should be useful for policy maker, investor, household and future researcher.