Portfolio flows and household portfolios

Dominik Boddin, Daniel te Kaat, Chang Ma and Alessandro Rebucci

European Economic Review, 2025, vol. 172, issue C

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.

Keywords: Capital flows; Portfolio flows; Household portfolio rebalancing; Real estate; Credit channel (search for similar items in EconPapers)
JEL-codes: F32 G11 G12 G51 R30 (search for similar items in EconPapers)
Date: 2025
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Related works:
Working Paper: Portfolio Flows and Household Portfolios (2024)
Working Paper: Portfolio Flows and Household Portfolios (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:172:y:2025:i:c:s0014292124002332

DOI: 10.1016/j.euroecorev.2024.104904

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