Arbeitspapier
The anatomy of consumption in a household foreign currency debt crisis
How do households adjust to a large debt shock? This paper studies household responses to a revaluation of foreign currency household debt during a large depreciation in Hungary. Relative to similar local currency debtors, foreign currency debtors reduce consumption expenditures approximately one-for-one with increased debt service, suggesting binding liquidity constraints. Foreign currency debtors reduce both the quantity and quality of expenditures, consistent with nonhomothetic preferences and a "flight from quality." Debt revaluation has no effect on labor market status, hours, or earnings, but there is a small adjustment toward foreign income streams and a substantial increase in home production.
- ISBN
-
978-92-899-5320-7
- Language
-
Englisch
- Bibliographic citation
-
Series: ECB Working Paper ; No. 2733
- Classification
-
Wirtschaft
Macroeconomics: Consumption; Saving; Wealth
Demand and Supply of Labor: General
- Subject
-
Marginal propensity to consume
flight from quality
home production
- Event
-
Geistige Schöpfung
- (who)
-
Gyöngyösi, Gyîozîo
Rariga, Judit
Verner, Emil
- Event
-
Veröffentlichung
- (who)
-
European Central Bank (ECB)
- (where)
-
Frankfurt a. M.
- (when)
-
2022
- DOI
-
doi:10.2866/760321
- Handle
- Last update
-
10.03.2025, 11:42 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Gyöngyösi, Gyîozîo
- Rariga, Judit
- Verner, Emil
- European Central Bank (ECB)
Time of origin
- 2022
Other Objects (12)
The anatomy of consumption in a household foreign currency debt crisis
The anatomy of consumption in a household foreign currency debt crisis
The anatomy of consumption in a household foreign currency debt crisis
Debt and Household Consumption Responses
Household debt and consumption inequality: The Spanish case
Household debt revaluation and the real economy: Evidence from a foreign currency debt crisis
Currency Portfolio of External Debt, Exchange Rate Cyclicality, and Consumption Volatility
Currency Concentration in Sovereign Debt, Exchange Rate Cyclicality, and Volatility in Consumption
Family Finances and Debt Overhang: Evolving Consumption Patterns of Spanish Households
Household debt, liquidity constraints and the interest rate elasticity of private consumption
Monetary Policy with Foreign Currency Debt
The heterogeneous effects of COVID-19 on Canadian household consumption, debt and savings
The anatomy of consumption in a household foreign currency debt crisis
The anatomy of consumption in a household foreign currency debt crisis
The anatomy of consumption in a household foreign currency debt crisis
Debt and Household Consumption Responses
Household debt and consumption inequality: The Spanish case
Household debt revaluation and the real economy: Evidence from a foreign currency debt crisis
Currency Portfolio of External Debt, Exchange Rate Cyclicality, and Consumption Volatility
Currency Concentration in Sovereign Debt, Exchange Rate Cyclicality, and Volatility in Consumption
Family Finances and Debt Overhang: Evolving Consumption Patterns of Spanish Households
Household debt, liquidity constraints and the interest rate elasticity of private consumption
Monetary Policy with Foreign Currency Debt
The heterogeneous effects of COVID-19 on Canadian household consumption, debt and savings
The anatomy of consumption in a household foreign currency debt crisis
The anatomy of consumption in a household foreign currency debt crisis
The anatomy of consumption in a household foreign currency debt crisis
Debt and Household Consumption Responses
Household debt and consumption inequality: The Spanish case
Household debt revaluation and the real economy: Evidence from a foreign currency debt crisis
Currency Portfolio of External Debt, Exchange Rate Cyclicality, and Consumption Volatility
Currency Concentration in Sovereign Debt, Exchange Rate Cyclicality, and Volatility in Consumption
Family Finances and Debt Overhang: Evolving Consumption Patterns of Spanish Households
Household debt, liquidity constraints and the interest rate elasticity of private consumption
Monetary Policy with Foreign Currency Debt