Quantitative Economics
Journal Of The Econometric Society
Edited by: Stéphane Bonhomme • Print ISSN: 1759-7323 • Online ISSN: 1759-7331
Edited by: Stéphane Bonhomme • Print ISSN: 1759-7323 • Online ISSN: 1759-7331
Quantitative Economics: Nov, 2024, Volume 15, Issue 4
https://doi.org/10.3982/QE2068
p. 1249-1301
Thomas Hintermaier|Winfried Koeniger
This paper quantifies mechanisms through which heterogeneity in household finances affects the transmission of monetary policy, considering housing tenure choices over the life cycle. Our analysis also identifies challenges for monetary policy related to housing busts. It focuses on the four largest economies in the euro area: France, Germany, Italy, and Spain. Through the lens of our model, we find that home ownership and endogenous transitions from renting to owning are key elements for the extent of cross‐country asymmetries in aggregate consumption responses to changes in the real interest rate. Across groups with different housing tenure, we find that the consumption response of homeowners to interest rate changes tends to be larger than the response of renters, particularly if these homeowners are indebted and do not adjust their illiquid housing wealth.
Thomas Hintermaier and Winfried Koeniger
This supplemental appendix contains material not found within the manuscript.
Thomas Hintermaier and Winfried Koeniger
The replication package for this paper is available at https://doi.org/10.5281/zenodo.11397064. The authors were granted an exemption to publish their data because either access to the data is restricted or the authors do not have the right to republish them. Therefore, the replication package only includes the codes but not the data. However, the authors provided the Journal with (or assisted the Journal to obtain) temporary access to the data. The Journal checked the restricted data and the provided codes for their ability to reproduce the results in the paper and approved online appendices.
December 4, 2024