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Re-examining the decline in the US saving rate: The impact of mortgage equity withdrawal

  • Caporale, Guglielmo Maria
  • Costantini, Mauro
  • Paradiso, Antonio

This paper investigates the effect of mortgage equity withdrawal on saving in the US over the period 1993–2011. A multivariate time series analysis based on a vector error correction model (VECM) is carried out. The saving rate, mortgage equity withdrawal, net wealth, interest rates and inflation are included in the empirical model. The results show that the equity withdrawal mechanism plays a relevant role in explaining the saving rate pattern.

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Article provided by Elsevier in its journal Journal of International Financial Markets, Institutions and Money.

Volume (Year): 26 (2013)
Issue (Month): C ()
Pages: 215-225

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Handle: RePEc:eee:intfin:v:26:y:2013:i:c:p:215-225
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