Not surprisingly, this is highly correlated with the rate of interest, but it has an identifiably separate influence. When the rate of growth of incomes slows, the debt to income ratio of each borrowing household is eroded more slowly than in a higher inflation environment.
5  4  L. Bini Smaghi (2007), “Consolidamento bancario, innovazione e accesso al credito, CESIFIN, Florence, 10 December 2007, available at http://www.ecb.int/press/key/date/2007/html/sp071210.it.html. 5  See also Bruegel (2007): “Coming of age: report on the euro area”, Bruegel Blueprint 4.