Economic theory predicts that the consumption path of unconstrained homeowners responds to the interest rate, while the … consumption path of credit constrained homeowners is determined by the size and timing of payments (mortgage maturity). We exploit … to estimate group-specific consumption responses to changes in the credit conditions. Our estimates suggest that the …

output changes. In the euro area investment is the predominant driver of output changes, while in the U.S. consumption shifts … several potential explanations for it. While the evidence seems to point at differences in consumption responses, rather than … investment, as the proximate cause for this fact, the source of the consumption difference remains a puzzle. …

Based on the householdsu0092 utility maximisation, a closed form approximation of the consumption function is derived … and the deep parameters of the consumption function are estimated using aggregate euro area data. The novel element in our … lot of information on future income changes, but that also lagged consumption, through habit formation, plays an important …

underlying model. To address this question, in this paper I estimate the New Keynesian IS curve for output and consumption and … consumption are mainly forward looking, and this is a very robust feature of the data. At the same time, I find little evidence in …