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Household savings constraints, uncertainty and macroprudential policy
Author(s) -
O'Toole Conor,
McQuinn Kieran,
Economides Philip
Publication year - 2021
Publication title -
scottish journal of political economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.4
H-Index - 46
eISSN - 1467-9485
pISSN - 0036-9292
DOI - 10.1111/sjpe.12267
Subject(s) - renting , economics , cash , loan , irish , value (mathematics) , monetary economics , business , finance , linguistics , philosophy , political science , law , machine learning , computer science
We investigate the impact of macroprudential policy on Irish households' perception of savings adequacy, with a particular focus on households intending to purchase a home. These measures tighten loan‐to‐value ratios and raise the entry cost for home purchase. We find that the measures have had a significant impact on savings constraints. Indeed, constrained potential buyers, who are planning to purchase, but not presently saving to buy a home, are the group most affected as the macroprudential rules increase the downpayment size required. Heterogeneous effects across households indicate younger, private renting households, and those with relatively uncertain cash flows.