Household debt in the US doubled from 2001 to 2007, leading to a high debt-to-income ratio not seen since 1929. The researchers studied why this happened and how it affected the economy. They found that the increase was mainly due to more mortgage loans given to low credit-quality households. These loans were bundled and sold to investors, targeting areas with many subprime borrowers. This led to a collapse in 2008. The study suggests that understanding the impact of household debt is crucial for understanding the link between finance and the economy.