Chapter Structural Patterns and Dynamics of Household Financial Fragility

Overview & Synopsis

Over the past three decades, Central and Eastern Europe has experienced rapid economic transformation, accelerated by accession to the European Union and deeper integration into global financial markets. While improved access to credit has supported rising living standards, it has also increased households’ exposure to financial fragility when economic shocks occur. This book investigates the financial fragility of households in the region, offering new insights into how households cope with economic shocks and structural change. Despite shared experience of post-socialist transformation, Central and Eastern European countries display significant economic, social, and institutional diversity. This raises important questions: Do households across the region differ in their levels of financial fragility? Which socio-demographic groups are most vulnerable? What factors shape household resilience to economic shocks? Combining conceptual discussion with comparative empirical analysis, the book examines the determinants and dynamics of household financial fragility across the region. It explores changes in household financial conditions – including consumption patterns, debt dynamics, savings behaviour, and subjective financial well-being – and identifies cross-country differences in vulnerability using comparative and cluster-based approaches. The analysis also discusses how external shocks, including the global financial crisis of 2008 and the COVID-19 pandemic, have shaped household financial stability. By linking structural transformation, institutional context, and household-level outcomes, the book fills an important gap in the literature and offers new insights into the challenges of strengthening household resilience in the face of economic shocks. This book will be of interest to researchers, policymakers, and students in economics, finance, consumer economics, and European studies who seek a deeper understanding of household financial fragility in Central and Eastern Europe.