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Household savings constraints, uncertainty and macroprudential policy

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  • Economides, Philip
  • McQuinn, Kieran
  • O'Toole, Conor

Abstract

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.
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  • Economides, Philip & McQuinn, Kieran & O'Toole, Conor, 2019. "Household savings constraints, uncertainty and macroprudential policy," Papers WP618, Economic and Social Research Institute (ESRI).
    • Handle: RePEc:esr:wpaper:wp618
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    Cited by:

    1. Varthalitis, Petros & Allen-Coghlan, Matthew, 2020. "Comparing two recessions in Ireland: Global financial crisis vs COVID-19," Research Notes RN20200401, Economic and Social Research Institute (ESRI).
    2. Corrigan, Eoin & O'Toole, Conor & Slaymaker, 2020. "Credit demand in the Irish mortgage market: What is the gap and could public lending help?," Papers WP671, Economic and Social Research Institute (ESRI).
    3. McQuinn, Kieran & O'Toole, Conor & Allen-Coghlan, Matthew & Coffey, Cathal, 2020. "Quarterly Economic Commentary, Winter 2020," Forecasting Report, Economic and Social Research Institute (ESRI), number QEC2020WIN, march.

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