Yelena Takhtamanova

Wealth Effects Out of Financial and Housing Wealth: Cross Country and Age Group Comparisons

To explore the link between household consumption and wealth, we use a new source of harmonized microdata (Luxembourg Wealth Study). We investigate whether there are differences in wealth effects from different types of wealth and across age groups. We consider three countries: Canada, Italy and Finland. We find that the overall wealth effect from housing is stronger than the effect from financial wealth for the three countries in the sample. Additionally, in accordance with the life-cycle theory of consumption, we find the housing wealth effect to be significantly lower for younger households. We also find between-country differences in the wealth effect.

Gender, Monetary Policy, and Employment: The Case of Nine OECD Countries

Abstract In many countries, low and stable inflation is the focus of monetary policy. Recent empirical evidence from developing countries indicates, however, that the costs of reducing inflation are disproportionately borne by women. This paper seeks to determine whether a similar pattern is evident in nine Organisation for Economic Co-operation and Economic Development (OECD) countries, using quarterly data for 1980–2004. The study examines economy-wide and sectoral employment effects by gender by utilizing two methodologies: single equation regression and vector autoregression analysis. Results indicate that the link between monetary policy instruments (short-term interest rates) and employment in the industrial countries under investigation is weak and does not vary by gender.

Mortgage Choice: Interactive Effects of House Price Appreciation and Mortgage Pricing Components

Previous research provides rationales for and evidence of a link between house price appreciation and mortgage choice, with higher appreciation associated with higher take-up rates for adjustable-rate mortgages relative to fixed-rate mortgages. Research also finds mortgage interest rates and their underlying components to be important determinants of mortgage financing choices. In this paper we extend the earlier research and show that house price appreciation can have important interactive effects with those other determinants of mortgage financing choices. The analysis focuses on the period from 2000 to 2007, an episode marked by rapid house price appreciation along with a persistent and notable increase in the use of adjustable-rate mortgage financing, including alternative mortgage products. We find that higher house price appreciation dampened the estimated sensitivity of take-up rates among mortgage financing options to the underlying mortgage pricing components. The results, which are especially robust for fixed-rate and adjustable-rate mortgages that are fully amortized, were not driven solely by observations in markets with especially high rates of house price appreciation. Moreover, after taking into account the interactive effects with mortgage pricing components, house price appreciation is estimated to have had relatively little additional effect on take-up rates among mortgage financing options.