Interest Rate Pass-Through : Mortgage Rates , Household Consumption , and Voluntary Deleveraging †

@inproceedings{Maggio2017InterestRP,
  title={Interest Rate Pass-Through : Mortgage Rates , Household Consumption , and Voluntary Deleveraging †},
  author={Marco di Maggio and Amir R. M. Kermani and Benjamin J. Keys and Tomasz Piskorski and Rodney Ramcharan and Amit Seru and Vincent Yao},
  year={2017}
}
Exploiting variation in the timing of resets of adjustable-rate mortgages (ARMs), we find that a sizable decline in mortgage payments (up to 50 percent) induces a significant increase in car purchases (up to 35 percent). This effect is attenuated by voluntary deleveraging. Borrowers with lower incomes and housing wealth have significantly higher marginal propensity to consume. Areas with a larger share of ARMs were more responsive to lower interest rates and saw a relative decline in defaults… CONTINUE READING
Highly Cited
This paper has 20 citations. REVIEW CITATIONS

References

Publications referenced by this paper.
Showing 1-10 of 47 references

Optimal Mortgage Refinancing: A Closed Form Solution.

Journal of money, credit, and banking • 2013
View 4 Excerpts
Highly Influenced

Interest Rate Pass - Through : Mortgage Rates , Household Consumption , and Voluntary Deleveraging : Dataset

C. Janice, Arvind Krishnamurthy.
American Economic Review • 2017

The Importance of Unemployment Insurance

Di Maggio, Marco, Amir Kermani
2016

The Transmission of Monetary Policy through Redistri

Sterk, Vincent, Silvana Tenreyro
2016

A Model of the Consumption Response to Fiscal Stimulus Payments.

Kaplan, Greg, Giovanni L. Violante
Econometrica • 2014

Efficient Credit Polices in a Housing Debt Cri

James Vickery
Brookings Papers on Economic Activity ( Fall • 2014

Efficient Credit Polices in a Housing Debt Crisis.

Eberly, C Janice, Arvind Krishnamurthy
Brookings Papers on Economic Activity • 2014

Similar Papers

Loading similar papers…