<p><p>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.</p></p>
Authors
Research Associate London School of Economics
Timothy is a Research Associate at the IFS and a Professor of Economics and Political Science at the London School of Economics and Political Science.
Neil Meads
Paolo Surico
Report details
- Publisher
- Bank of England
Suggested citation
T, Besley and N, Meads and P, Surico. (2008). Household external finance and consumption. London: Bank of England. Available at: https://ifs.org.uk/publications/household-external-finance-and-consumption (accessed: 13 May 2024).
Related documents
More from IFS
Understand this issue
Gender norms, violence and adolescent girls’ trajectories: Evidence from India
24 October 2022
Empty defence spending promises are a shot in the dark
29 April 2024
Public investment: what you need to know
25 April 2024
Policy analysis
ABC of SV: Limited Information Likelihood Inference in Stochastic Volatility Jump-Diffusion Models
We develop novel methods for estimation and filtering of continuous-time models with stochastic volatility and jumps using so-called Approximate Bayesian Compu- tation which build likelihoods based on limited information.
12 August 2014
Assessing the economic benefits of education: reconciling microeconomic and macroeconomic approaches
This CAYT report discusses the strengths and limitations of several approaches to assessing the effect of education on productivity.
14 March 2013
Misreported schooling, multiple measures and returns to educational qualifications
We provide a number of contributions of policy, practical and methodological interest to the study of the returns to educational qualifications in the presence of misreporting.
1 February 2012
Academic research
Understanding Society: minimising selection biases in data collection using mobile apps
2 February 2024
Robust analysis of short panels
8 January 2024
A coefficient of variation for ordered categorical data: Analyzing relative health inequality and ageing in the UK and relative human resource inequality and gender in Canada
21 December 2023