Disentangling the effect of household debt on consumption

We estimate the relationship between household mortgage debt and consumption for period 2006 to 2015. Using Dutch administrative data, we find that average of households with high prior financial crisis has decreased much more during than other households. also willingness or ability among use new finance one-off crisis. On macro-level, drop in is predominantly driven by who were already debt. They are responsible a 7 percentage points macro-consumption at worst point Within this group, negative home equity explains 6 total macro-consumption.