The impact of house price index and household debt on economic growth in OECD Countries / Noorhafifah Shamsul Ariffin

The increase in house price index and household debts in OECD countries which has escalated is deemed to be at worrying stage as it may in turn trigger another financial crisis. Thus, the aim of this study is to identify the correlation between house price index and the economic growth. The study also investigates the effect of household debt on economic growth and to determine which factor contributes to the economic growth in OECD countries via panel data techniques. Data collected from World Bank Data and OECD website from 2007 to 2017 by using OECD countries as sample. The estimation results show that there is a significant relationship between GDP per capita with house prices index, household debt, and inflation. While the rest indicators such as population and interest rate are not significant on economic growth in OECD countries., Furthermore, the policy maker should take an initiative to control the property price in order to mitigate any bubble in asset price. It is also recommended to adding more reliable independent variables for example household income, household consumption, and interest rate on housing loan, so that the future researcher can secure a better outcome.