Which debt belongs to the state and which debt belongs to the market? Comparative new evidence several capitalist regimes

This study discovers the relationship between household/private and state debt using a critical approach and provides robust econometric evidence. While the connections between state and household debt manifest through both symmetrical and asymmetrical mechanisms, these mechanisms also comprise different subcomponents. These differences emerge from the temporal harmonization of debt dynamics. The analysis employs unit root tests, revealing multiple structural breaks, alongside hidden cointegration tests and spectral Granger causality test. The findings indicate a trade-off between household/private and state debt. Based on these insights, this study introduces two novel concepts to distinguish between symmetric and asymmetric relationships: debrolling referring to asymmetric mechanisms, and rerolling describing symmetric mechanisms. These concepts contribute to a broader understanding of debt substitution dynamics and provide a fresh perspective on the interaction between state and household indebtedness.