Publication type
Journal Article
Authors
Publication date
June 1, 2011
Summary:
This paper uses a realistic structural lifecycle model of consumption and housing decisions to understand how data might distinguish different mechanisms that explain the correlation between house prices and consumption. The model includes price and earnings shocks estimated from data (the latter including aggregate and idiosyncratic components), and incorporates realistic features of the UK mortgage market. We simulate the model using more than 30 years of realized shocks and under counterfactual scenarios. Our results confirm the intuition of earlier studies: house price shocks should have a larger effect on the consumption of older households and earnings shocks on young households.
Published in
Journal of the European Economic Association
Volume and page numbers
Volume: 9 , p.399 -435
DOI
http://dx.doi.org/10.1111/j.1542-4774.2011.01021.x
Subjects
Notes
Albert Sloman Library Periodicals *restricted to Univ. Essex registered users*
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