Consumption, household portfolios and the housing market in France
Not all co-movements between consumption and wealth are wealth effects. Some result from common factors: shifts in credit conditions, interest rates, income expectations or demographics. Unravelling these is necessary for modelling linkages between households and finance. The findings for France fro...
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| Format: | Journal article |
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Institut National de la Statistique et des Etudes Economiques
2018
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| _version_ | 1826290711935320064 |
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| author | Chauvin, V Muellbauer, J |
| author_facet | Chauvin, V Muellbauer, J |
| author_sort | Chauvin, V |
| collection | OXFORD |
| description | Not all co-movements between consumption and wealth are wealth effects. Some result from common factors: shifts in credit conditions, interest rates, income expectations or demographics. Unravelling these is necessary for modelling linkages between households and finance. The findings for France from a 6-equation model for consumption and the main elements of household portfolios are that marginal propensities to consume financial wealth are comparable to those in the US or the UK, but housing wealth effects are far weaker, and aggregate consumption falls with higher house prices relative to income. This is interpreted as the need for younger households in France then to save more if they wish to become homeowners, while other tenants can expect rents to increase in the future, saving more in consequence. The estimates suggest that during the French house price boom between 1996 and 2008, offsets from the negative effect of higher house prices and higher debt neutralized the positive effects of higher housing wealth and easier credit on consumption, avoiding the amplifying feedbacks, via consumption, of the US boom. |
| first_indexed | 2024-03-07T02:48:23Z |
| format | Journal article |
| id | oxford-uuid:acce8994-628a-4704-82e3-222c7dc3bb08 |
| institution | University of Oxford |
| last_indexed | 2024-03-07T02:48:23Z |
| publishDate | 2018 |
| publisher | Institut National de la Statistique et des Etudes Economiques |
| record_format | dspace |
| spelling | oxford-uuid:acce8994-628a-4704-82e3-222c7dc3bb082022-03-27T03:31:28ZConsumption, household portfolios and the housing market in FranceJournal articlehttp://purl.org/coar/resource_type/c_dcae04bcuuid:acce8994-628a-4704-82e3-222c7dc3bb08Symplectic Elements at OxfordInstitut National de la Statistique et des Etudes Economiques2018Chauvin, VMuellbauer, JNot all co-movements between consumption and wealth are wealth effects. Some result from common factors: shifts in credit conditions, interest rates, income expectations or demographics. Unravelling these is necessary for modelling linkages between households and finance. The findings for France from a 6-equation model for consumption and the main elements of household portfolios are that marginal propensities to consume financial wealth are comparable to those in the US or the UK, but housing wealth effects are far weaker, and aggregate consumption falls with higher house prices relative to income. This is interpreted as the need for younger households in France then to save more if they wish to become homeowners, while other tenants can expect rents to increase in the future, saving more in consequence. The estimates suggest that during the French house price boom between 1996 and 2008, offsets from the negative effect of higher house prices and higher debt neutralized the positive effects of higher housing wealth and easier credit on consumption, avoiding the amplifying feedbacks, via consumption, of the US boom. |
| spellingShingle | Chauvin, V Muellbauer, J Consumption, household portfolios and the housing market in France |
| title | Consumption, household portfolios and the housing market in France |
| title_full | Consumption, household portfolios and the housing market in France |
| title_fullStr | Consumption, household portfolios and the housing market in France |
| title_full_unstemmed | Consumption, household portfolios and the housing market in France |
| title_short | Consumption, household portfolios and the housing market in France |
| title_sort | consumption household portfolios and the housing market in france |
| work_keys_str_mv | AT chauvinv consumptionhouseholdportfoliosandthehousingmarketinfrance AT muellbauerj consumptionhouseholdportfoliosandthehousingmarketinfrance |