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Differences in euro-area household finances and their relevance for monetary-policy transmission

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dc.contributor.author Hintermaier, Thomas
dc.contributor.author Koeniger, Winfried
dc.date.accessioned 2018-09-26T15:58:57Z
dc.date.available 2018-09-26T15:58:57Z
dc.date.issued 2018-05
dc.identifier.uri http://hdl.handle.net/10230/35507
dc.description.abstract This paper quantifies the extent of heterogeneity in consumption responses to changes in real interest rates and house prices in the four largest economies in the euro area: France, Germany, Italy, and Spain. We first calibrate a life-cycle incomplete-markets model with a liquid financial asset and illiquid housing to match the large heterogeneity of households asset portfolios, observed in the Household Finance and Consumption Survey (HFCS) for these countries. We then show that the heterogeneity in household finances implies that responses of consumption to changes in the real interest rate and in house prices differ substantially across the analyzed countries, and across age groups within these countries. The different consumption responses quantified in this paper point towards important heterogeneity in monetary-policy transmission within the euro area.
dc.description.sponsorship The ADEMU Working Paper Series is being supported by the European Commission Horizon 2020 European Union funding for Research & Innovation, grant agreement No 649396.
dc.format.mimetype application/pdf
dc.language.iso eng
dc.relation.ispartofseries ADEMU Working Paper Series;119
dc.rights This is an Open Access article distributed under the terms of the Creative Commons Attribution License Creative Commons Attribution 4.0 International, which permits unrestricted use, distribution and reproduction in any medium provided that the original work is properlyattributed.
dc.rights.uri https://creativecommons.org/licenses/by/4.0/
dc.subject.other European household portfolios
dc.subject.other Consumption
dc.subject.other Monetary policy transmission
dc.subject.other International comparative finance
dc.subject.other Housing
dc.title Differences in euro-area household finances and their relevance for monetary-policy transmission
dc.type info:eu-repo/semantics/workingPaper
dc.relation.projectID info:eu-repo/grantAgreement/EC/H2020/649396
dc.rights.accessRights info:eu-repo/semantics/openAccess

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