📄 Paper: papers.ssrn.com/sol3/papers....
15.12.2025 10:07
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🧵5/5: Why it matters: vulnerable households channel windfalls into auto debt—a depreciating, illiquid asset. Policymakers face a trade-off: larger short-run stimulus among vulnerable households, but greater long-run fragility.
🧵4/5: For mortgages, the pattern reverses: vulnerable households sharply reduce mortgage debt growth, while financially secure households do not.
🧵3/5: Key finding: responses depend on financial health AND debt type. All households restrain credit card growth. But auto loans show the starkest divide—vulnerable households use income as a gateway to new auto credit, while healthy households deleverage.
🧵2/5: How do households adjust their debt portfolios after an income boost? Using Experian credit bureau data and two identification strategies—a Bartik instrument and a novel shale oil discovery design—we uncover a sharp bifurcation that average effects completely mask.
📢 New working paper out!
"The Heterogeneous Reactions of Household Debt to Income Shocks" with Elena Loutskina and Daniel Murphy.
This paper is the product of my research stay at Darden—grateful to Dan, Elena, and the entire UVA Darden community for being gracious hosts. 🧵1/5
We are also thankful to Sciensano, the Belgian institute for health, for providing us with anonymized data for COVID-19 cases, tests, and vaccinations.
Takeaway: Understanding consumer heterogeneity & the changing roles of pandemic severity, NPIs, & vaccines is vital. Policies need to account for these varied impacts across groups & time for effective crisis response. 🧵8/8
Finding 3: The pandemic's impact varied for different households (hhs). i) Lower-income hhs cut spending more from infection fears. ii) Higher-wealth hhs cut spending more in strict lockdowns. iii) Older hhs reacted more strongly to both infection rates & NPIs. 🧵7/8
Vaccinations didn't just boost spending directly, they also reduced the negative impact of BOTH infection fears and government restrictions. Higher vaccination coverage = smaller consumption drops from infections fears & NPIs. 🧵6/8
Finding 2: Good news! Higher local vaccination rates significantly boosted household consumption 📈. A 1% increase in fully vaccinated adults in a municipality lifted weekly spending by ~0.04% on average. 🧵5/8
Finding 1: Both higher local COVID positivity rates & stricter government measures led to bigger consumption drops. BUT their importance shifted! Fear of infection dominated Wave 1, while NPIs mattered more in Wave 2. By Wave 3, both hit spending hard. 🧵4/8
Thanks to BNP Paribas Fortis, we used a unique dataset of anonymized bank transactions. This allowed us to retrieve consumption data, which we combined with municipal indicators for COVID-19 severity (cases/tests), government stringency (NPIs), & vaccination rates. 🧵3/8
The COVID-19 pandemic hit economies hard, especially household consumption. But was it the virus itself, government restrictions, or something else driving the changes? And how did this evolve over different waves and with vaccines? 🧵2/8
🚨 Just published!
📄 Our new paper w/ Selien De Schryder, KoenSchoors & Johannes Weytjens explores how COVID severity, NPIs & vaccines heterogeneously impacted household consumption in Belgium 🇧🇪, using unique bank data.
Check it out:
doi.org/10.1016/j.jm...
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📢 Exciting News! The Empirical Macro Workshop is returning to Ghent on May 20-21, 2025! 🏛️📊
Submission Deadline: 🗓️ April 4, 2025
Notification of Acceptance: 📩 April 23, 2025
For more details and submission guidelines, visit our website: 🔗 www.empiricalmacroworkshop.ugent.be
See you there! 💬📢
Call for Papers AMEF 2025
amef.uom.gr