Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/61017
Authors: 
Caporale, Guglielmo Maria
Costantini, Mauro
Paradiso, Antonio
Year of Publication: 
2012
Series/Report no.: 
CESifo Working Paper: Monetary Policy and International Finance 3897
Abstract: 
In this paper we examine the role of mortgage equity withdrawal in explaining the decline of the US saving rate, since when house prices rise and mortgage rates are low, homeowners have an incentive to withdraw housing equity and this may affect the saving rate. We estimate a Vector Error Correction (VEC) model including the saving rate, asset prices, equity withdrawal and interest rates and find that indeed mortgage equity withdrawal is a key determinant of the observed saving pattern.
Subjects: 
saving rate
mortgage equity withdrawal
asset prices
mortgage rates
Vector Error Correction
impulse response analysis
JEL: 
C32
E21
O51
Document Type: 
Working Paper

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