Current EOPP Research:
Household External Finance and Consumption
Tim Besley (with Neil Meads and Paolo Surico, 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
U.K. data. Results are robust to a wide variety of specifications.
Related paper
Household External Finance and Consumption
