Financial markets and household consumption

Purpose and goal

The aim of the project is to investigate how household consumption is affected by financial market conditions and how housing prices and economic policies, such as stabilization policies and credit market regulations, affect this relationship. The project studies the relationship between housing prices and consumption, and how mortgage contract design affect households´ consumption sensitivity to shocks. The overall goal of the studies is to improve our understanding of the interplay between financial markets and demand, as well as to promote an effective economic policy.

Expected effects and result

Using new micro data and new macroeconomic models, our studies will uncover the complex economic relationships between lending behavior, consumption and conditions on the financial markets.

Planned approach and implementation

The project focuses on households´ consumption of homes and cars because they are often financed through loans. Initially, we match commercial price data on homes and cars against micro data. After this, we work in parallel with the various studies.