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Household External Finance and Consumption

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Author Info
Besley, Timothy J.
Meads, Neil
Surico, Paolo

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

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Find related papers by JEL classification:
D10 - Microeconomics - - Household Behavior - - - General
E21 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Mortgages

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