Differences in Euro-Area Household Finances and their Relevance for Monetary-Policy Transmission

Thomas Hintermaier and Winfried Koeniger

No 7088, CESifo Working Paper Series from CESifo

Abstract: This paper quantifies mechanisms through which heterogeneity in household finances affects the transmission of monetary policy, considering housing tenure choices over the life cycle. Our analysis focuses on the four largest economies in the euro area: France, Germany, Italy, and Spain. Across these countries, we find that responses of consumption to changes in the real interest rate and in house prices differ substantially. Our analysis links the differences in the aggregate responses to the underlying heterogeneity in household characteristics such as age, housing tenure, and asset positions. We quantify how the size of the responses depends on household expectations about future financing conditions affected by forward guidance.

Keywords: consumption; household portfolios; housing; monetary policy transmission; forward guidance (search for similar items in EconPapers)
JEL-codes: D14 D15 D31 E21 E43 G11 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-dge, nep-mac and nep-mon
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Citations: View citations in EconPapers (12)

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Related works:
Working Paper: Differences in Euro-Area Household Finances and their Relevance for Monetary-Policy Transmission (2019)
Working Paper: Differences in Euro-Area Household Finances and their Relevance for Monetary-Policy Transmission (2019)
Working Paper: Differences in euro-area household finances and their relevance for monetary-policy transmission (2019)
Working Paper: Differences in Euro-Area Household Finances and their Relevance for Monetary-Policy Transmission (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_7088

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