Take it to the limit? : the effects of household leverage caps
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- dc.contributor.author Bekkum, Sjoerd Van
- dc.contributor.author Gabarro, Marc
- dc.contributor.author Irani, Rustom M.
- dc.contributor.author Peydró, José-Luis
- dc.date.accessioned 2020-03-03T17:20:17Z
- dc.date.available 2020-03-03T17:20:17Z
- dc.date.issued 2022-02-14
- dc.description.abstract We analyze the effects of borrower-based macroprudential policy at the household-level. For identification, we exploit administrative Dutch tax-return and property data linked to the universe of housing transactions, and an introduction of loan-to-value regulation. The regulation reduces overall household leverage, with bunching in its limit. Ex-ante more-affected households substantially reduce leverage and debt servicing costs. Rather than buying cheaper homes or taking lightly-regulated loans, households consume greater liquidity to satisfy the regulation. Improvements in household solvency result in less financial distress and, given negative idiosyncratic shocks, better liquidity management. However, fewer households transition from renting into ownership. These effects are stronger among liquidity-constrained households.en
- dc.format.mimetype application/pdf*
- dc.identifier.uri http://hdl.handle.net/10230/43783
- dc.language.iso engca
- dc.rights.accessRights info:eu-repo/semantics/openAccessca
- dc.subject.keyword Macroprudential policyen
- dc.subject.keyword Residential mortgagesen
- dc.subject.keyword Solvency vs. liquidity trade-offen
- dc.subject.keyword Household leverageen
- dc.subject.keyword Loan-to-value ratioen
- dc.title Take it to the limit? : the effects of household leverage capsca
- dc.type info:eu-repo/semantics/workingPaperca