TY  - UNPD
A1  - Hintermaier, Thomas
A1  - Koeniger, Winfried
T1  - Household debt and crises of confidence
T2  - Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 519
N2  - We show that the size of collateralized household debt determines an economy’s vulnerability to crises of confidence. The house price feeds back on itself by contributing to a liquidity effect, which operates through the value of housing in a collateral constraint. Over a specific range of debt levels this liquidity feedback effect is strong enough to give rise to multiplicity of house prices. In a dynamic setup, we conceptualize confidence as a realization of rationally entertainable belief-weightings of multiple future prices. This delivers debt-level-dependent bounds on the extent to which confidence may drive house prices and aggregate consumption.
T3  - CFS working paper series - 519 
KW  - Household debt
KW  - Consumer confidence
KW  - Collateral constraints
KW  - Multiple equilibria
Y1  - 2015
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/38660
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-386603
UR  - http://ssrn.com/abstract=2672944
N1  - First version: February 2012 – This version: October 1, 2015
IS  - This version: October 1, 2015
PB  - Center for Financial Studies
CY  - Frankfurt, M.
ER  -