Cross?Border Debt Flows and Credit Allocation: Firm?Level Evidence from the Euro Area

The real effects of credit constraints: Evidence from discouraged borrowers in the euro area

This paper uses a new survey-based data set and a model with strong theoretical underpinnings to explain the characteristics and behaviour of discouraged borrowers in the euro area. The results show that more borrowers are discouraged when the average interest rate charged by banks in a country is higher. Higher corporate tax rates, on the other hand, lead to lower discouragement. We show that ...

Saving Imbalances and the Euro Area Sovereign Debt Crisis

For several years prior to 2010, countries in the euro area periphery engaged in heavy borrowing from foreign private investors, allowing domestic spending to outpace incomes. Now these countries face debt crises refl ecting a loss of investor confi dence in the sustainability of their fi nances. The result has been an abrupt halt in private foreign lending to these economies. This study explai...

Wealth effects on consumption: evidence from the euro area

This paper estimates the wealth effects on consumption in the euro area as a whole. I show that: (i) financial wealth effects are relatively large and statistically significant; (ii) housing wealth effects are virtually nil and not significant; (iii) consumption growth exhibits strong persistence and responds sluggishly to shocks; and (iv) the immediate response of consumption to wealth is subs...

Money, Credit, and Euro-Dollars

US and European Household Debt and Credit Constraints: Comparative Micro Evidence from the Last 15 Years

Household debt levels have increased substantially over the last decade, both in terms of the total amount outstanding and relative to incomes. At the same time, household debt portfolios became more diversified. While such qualitative observations apply to many OECD countries, the betweencountry differences remain very stark and are empirically more important than changes over time within any ...