Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/229003
Authors: 
Le Blanc, Julia
Lydon, Reamonn
Year of Publication: 
2020
Series/Report no.: 
ECB Working Paper No. 2389
Abstract: 
We analyse the effect of shocks to housing wealth and income before and after the Great Recession. We combine datasets containing information on expenditure, income, wealth and debt in a synthetic panel to understand how household indebtedness affects the response to income and wealth shocks.We find evidence for both a housing wealth effect and income shocks depressing household consumption during the crisis in Ireland. The long recovery of consumption is also related to high levels of indebtedness at the onset of the crisis. Households who entered the crisis with more debt are significantly more sensitive to changes in their income. In this way, household balance sheets can be an important amplification mechanism for aggregate shocks.
Subjects: 
Housing
income
wealth
expenditure
JEL: 
D14
D31
E21
H31
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-4032-0
Document Type: 
Working Paper

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