Michalis Haliassos, 19 May 2017

The 2017 CEPR European Workshop on Household Finance took place on 28-29 April 2017 at the Copenhagen Business School. This column introduces the CEPR Network on Household Finance and its goals, and also describes the papers that were presented at the workshop.

Carlos Garriga, Finn Kydland, Roman Šustek, 16 October 2016

Central banks responded to the financial crisis by cutting policy rates to prevent deflation and curb the decline in economic activity, but these responses have been anything but temporary. This column explores whether the sticky price channel is still relevant in an environment of persistently low rates. Although the effectiveness of the sticky price channel is limited, monetary policy instead transmits through mortgage debt. The recent period of low rates and low inflation has redistributed income and consumption from savers to mortgage borrowers.

James Cloyne, Clodomiro Ferreira, Paolo Surico, 21 April 2016

Monetary policy has significantly heterogeneous effects on private consumption, which depend on the household's debt and balance sheet position. This column suggests that households with mortgage debt behave in a liquidity-constrained manner, while those without are far less sensitive to movements in interest rates. Though the direct channel of monetary transmission – i.e. the movement in interest cash flows – also affects the expenditure of mortgagors, most of the aggregate effect comes via the stimulus to the income of all housing tenure groups.