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Household External Finance and Consumption

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  • Besley, Timothy J.
  • Meads, Neil
  • Surico, Paolo

Abstract

This paper uses mortgage data to construct a measure of terms on which households access to external finance, and relates it to consumption at both the aggregate and cohort levels. The Household External Finance (HEF) index is based on the spread paid by risky borrowers in the mortgage market. There is evidence that the terms of access to external finance matter more for the consumption of young cohorts in U.K. data. Results are robust to a wide variety of specifications.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 6934.

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Date of creation: Aug 2008
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Handle: RePEc:cpr:ceprdp:6934

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Keywords: birth cohorts; external finance; household consumption; pseudo panels; terms of access;

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References

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Citations

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Cited by:
  1. Giacomo Masier & Ernesto Villanueva, 2011. "Consumption and Initial Mortgage Conditions: Evidence From Survey Data," BCL working papers 52, Central Bank of Luxembourg.
  2. František Brazdik & Michal Hlavacek & Aleš Marsal, 2012. "Survey of Research on Financial Sector Modeling within DSGE Models: What Central Banks Can Learn from It," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 62(3), pages 252-277, July.

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