The impact of the 2008 financial crisis on household income and wealth in Visegrad countries

Abstract

Economic history conducting investigations into financial crises of the long 20th century primarily analyses the permanent character of crises and their macroeconomic consequences. Statistics focuses, primarily, on the number of bank failures, corpo-rate bankruptcies, low macroeconomic output (gross domestic product [GDP]), decreased em-ployment rates, increased inflation, and govern-ment debts. Both economic history and statistics only deal with the decrease in household income and with losses in their net wealth positions afterwards. The authors of this study investigate the impact of the 2008 crisis on household income and their net wealth positions. They also examine options of re-storing household income in Visegrad countries based on the data of NUTS 2 level (Nomenclature des unités territoriales statistiques) territorial units. The authors have used empirical analysis and statis-tical comparison for the change of the income and wealth situation of the Visegrad countries' house-holds. The results show that in the 2000s, the growth in the income gap between households slowed down, but after the crisis of 2008, the dif-ferentiation of the wealth of households in the re-gion continued. As a result of this crisis, the income differences also started to rise again, which led to even wider gaps in income inequalities. Recovery of income and wealth has begun, but it will take at least 3-4 years to reach the pace of the pre-crisis growth. In addition, its level could be permanently lower since households and credit institutions be-have more cautiously than before the crisis.