“Structural reform” is a term that policymakers like to utter, but it is often too vague to be meaningful. In particular, my hope is that work in this area can help policymaking escape the obsession of “competitiveness” which, when narrowly defined, focuses on export market shares, real exchange rates and unit labour costs (Cœuré, 2014).
Households do not just wake up one day and collectively decide to pay down their debt. But if incomes turn out weaker than they expect, or some other adverse news should arise, the households carrying the most debt might feel they have to rein in their spending quite a bit.