Housing wealth and consumption

Matteo Iacoviello

No 1027, International Finance Discussion Papers from Board of Governors of the Federal Reserve System (U.S.)

Abstract: Housing wealth is about one half of household net worth, and consumption is a considerable fraction (about two thirds) of Gross Domestic Product in the United States. Empirically, movements in housing wealth are associated with movements in consumption in the same direction. This observation has led many economists, commentators and policy makers to study how housing wealth and consumption are linked together. A sizeable portion of the comovement between housing wealth and consumption reflects common factors driving both variables, rather than the \"wealth effect\" of the former on the latter; however, a growing body of evidence suggests that the comovement is larger in developed financial markets and in the presence of liquidity constraints.

Keywords: Consumption (Economics) - United States; Home ownership - United States; Wealth - United States (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-ure
References: Add references at CitEc
Citations: View citations in EconPapers (20)

Downloads: (external link)
http://www.federalreserve.gov/pubs/ifdp/2011/1027/default.htm (text/html)
http://www.federalreserve.gov/pubs/ifdp/2011/1027/ifdp1027.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgif:1027

Access Statistics for this paper

More papers in International Finance Discussion Papers from Board of Governors of the Federal Reserve System (U.S.) Contact information at EDIRC.
Bibliographic data for series maintained by Ryan Wolfslayer ; Keisha Fournillier ().