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Portfolio flows and household portfolios

Author

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  • Boddin, Dominik
  • te Kaat, Daniel Marcel
  • Ma, Chang
  • Rebucci, Alessandro

Abstract

In this paper, we show that cross-border portfolio flows around the peak of the European Crisis induced households to rebalance their portfolios towards housing. Estimating difference-in-differences regressions around Draghi’s “Whatever It Takes” speech in July 2012 with household data from the ECB’s Household Finance and Consumption Survey, we find that portfolio inflows induce households with larger ex-ante bond and equity shares to rebalance more strongly towards housing. The effect is not driven by higher pre-treatment access to credit or higher credit growth during the treatment period and is stronger for wealthier and less risk-averse households.

Suggested Citation

  • Boddin, Dominik & te Kaat, Daniel Marcel & Ma, Chang & Rebucci, Alessandro, 2025. "Portfolio flows and household portfolios," European Economic Review, Elsevier, vol. 172(C).
    • Handle: RePEc:eee:eecrev:v:172:y:2025:i:c:s0014292124002332
    DOI: 10.1016/j.euroecorev.2024.104904
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    Keywords

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    JEL classification:

    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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