Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/189862 
Year of Publication: 
2017
Series/Report no.: 
Staff Report No. 821
Publisher: 
Federal Reserve Bank of New York, New York, NY
Abstract: 
We analyze the effect of import competition on household balance sheets from 2000 to 2007 using individual data on consumer finances. We exploit variation in exposure to foreign competition using industry-level shipping costs and initial differences in regions' industry specialization. We show that household debt increased significantly in regions where manufacturing industries are more exposed to import competition. A one standard deviation increase in exposure to import competition explains 30 percent of the cross-regional variation in household leverage growth, and is mostly driven by home equity extraction. Our results highlight the distributive effects of globalization and their consequences for household finances.
Subjects: 
trade
household finance
mortgages
JEL: 
D14
F6
G21
Document Type: 
Working Paper

Files in This Item:
File
Size
1.09 MB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.