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Discussion Paper Details

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Full Details

Title: Household External Finance and Consumption

Author(s): Timothy J. Besley, Neil Meads and Paolo Surico

Publication Date: August 2008

Keyword(s): birth cohorts, external finance, household consumption, pseudo panels and terms of access

Programme Area(s): Financial Economics

Abstract: This paper uses mortgage data to construct a measure of terms on which households access to external finance, and relates it to consumption at both the aggregate and cohort levels. The Household External Finance (HEF) index is based on the spread paid by risky borrowers in the mortgage market. There is evidence that the terms of access to external finance matter more for the consumption of young cohorts in U.K. data. Results are robust to a wide variety of specifications.

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Bibliographic Reference

Besley, T, Meads, N and Surico, P. 2008. 'Household External Finance and Consumption'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=6934