Household External Finance and Consumption

Timothy Besley (), Neil Meads () and Paolo Surico ()
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Neil Meads: Monetary Policy Committee Unit, Bank of England, Postal: Threadneedle Street, London EC2R 8AH

No 25, Discussion Papers from Monetary Policy Committee Unit, Bank of England

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 UK data. Results are robust to a wide variety of specifications.

Keywords: external finance; terms of access; household consumption; birth cohorts; pseudo panels (search for similar items in EconPapers)
JEL-codes: D10 E21 G21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ure
Date: Written

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Related works:
Working Paper: Household External Finance and Consumption (2008)
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Persistent link: http://EconPapers.repec.org/RePEc:mpc:wpaper:0025

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