Household Liquidity and the Mortgage Debt Channel of Monetary Policy with Matthew Elias, Christian Gillitzer, Greg Kaplan and Gianni LaCava
We examine what is widely considered to be one of the strongest channels of monetary policy transmission into household spending—the effect of changes in mortgage repayments when mortgage rates are linked to the short-term policy rate. Using bank transactions data from Australia, we analyze a cumulative 425 basis point increase in the central bank policy rate, which caused mortgage repayments for homeowners with adjustable-rate mortgages to increase by $13,800 over the tightening cycle. We find little change in the spending of adjustable-rate mortgagors relative to fixed-rate mortgagors. This is because adjustable-rate mortgagors used large excess repayment buffers they had accumulated to smooth consumption. Our findings demonstrate that high household liquidity, such as from a large fiscal stimulus, substantially weakens the effects of monetary tightening, even where there is a strong direct link between policy rates and household budgets.
Global Imbalances and the Global Savings Glut - A Panel Data Assessment with Anthony Legg and Tim Robinson
The effect of investor credit supply on housing prices, with Christian Gillitzer, Journal of Urban Economics, 2025.
The effect of school closures on standardized test scores: Evidence from a zero-COVID environment with Christian Gillitzer, Economics of Education Review, 2022.
The role of macroeconomic policy in explaining China's current account surplus Journal of Money, Credit and Banking, 2022. Online Appendix
Political Attitudes and Inflation Expectations: Evidence and Implications with Christian Gillitzer and Tim Robinson, Journal of Money, Credit and Banking, 2020 Online Appendix
The Effect of Consumer Sentiment on Consumption: Cross-Sectional Evidence from Elections with Christian Gillitzer, American Economic Journal: Macroeconomics, 2018 Online Appendix
Sterilized Interventions and Capital Controls, Journal of International Money and Finance, 2018 Online Appendix
Improving Median Housing Price Indexes Through Stratification with Anthony Richards, Journal of Real Estate Research, 2008.
Measuring Housing Prices: An Update with James and Anthony Richards, RBA Bulletin, June 2006.