Full metadata record
|dc.contributor.author||Nieuwerburgh, Stijn Van||-|
|dc.description.abstract||The covariance of regional consumption varies cross-sectionally and over time. Household-level borrowing frictions can explain this aggregate phenomenon. When the value of housing falls, loan collateral shrinks, borrowing (risk-sharing) declines, and the sensitivity of consumption to income increases. Using panel data from 23 US metropolitan areas, we find that in times and regions where collateral is scarce, consumption growth is about twice as sensitive to income growth. Our model aggregates heterogeneous, borrowing-constrained households into regions characterized by a common housing market. The resulting regional consumption patterns quantitatively match the data.||en|
|dc.subject||Regional risk sharing||en|
|dc.title||How Much Does Household Collateral Constrain Regional Risk Sharing?||en|
|Appears in Collections:||Finance Working Papers|
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