Work

Portfolio flows and household portfolios

Year: 2024

Type: article

Abstract: In this paper, we show that cross-border portfolio flows around the peak of the European Crisis induced households to rebalance their portfolios towards housing. Estimating difference-in-differences regressions around Draghi’s “Whatever It Takes” speech in July 2012 with household data from the ECB’s Household Finance and Consumption Survey, we find that portfolio inflows induce households with larger ex-ante bond and equity shares to rebalance more strongly towards housing. The effect is not driven by higher pre-treatment access to credit or higher credit growth during the treatment period and is stronger for wealthier and less risk-averse households.

Source: European Economic Review

DOI: 10.1016/j.euroecorev.2024.104904

Authors: Dominik Boddin, Daniel Marcel te Kaat, Chang Ma, Alessandro Rebucci