Hostname: page-component-586b7cd67f-l7hp2 Total loading time: 0 Render date: 2024-11-25T06:20:38.688Z Has data issue: false hasContentIssue false
  • English
  • Français

Housing, Consumption and Borrowing: An Assessment of Recent Personal Sector Behaviour in the UK

Published online by Cambridge University Press:  26 March 2020

Nigel Pain  and
Peter Westaway
Get access Rights & Permissions [Opens in a new window]

Extract

This note describes some results from recent research on the personal sector and the housing market in the UK, carried out at the National Institute over the last two years. The research has included the development of a theoretical micro-to-macro model which has subsequently been used to inform the specification of our econometric modelling work. This has resulted in the incorporation of a new system of equations for the personal sector in the NIESR macroeconometric model of the UK economy. This now includes new relationships characterising consumer spending (total and durables), housing demand, house prices, housing investment, consumer credit and ‘mortgage equity withdrawal. These equations are closely related to those described in Pain and Westaway (1994) which were developed in a project commissioned by HM Treasury.

Type
Articles
Information
National Institute Economic Review , Volume 149 , August 1994 , pp. 53 - 64
Copyright
Copyright © 1994 National Institute of Economic and Social Research

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

∗

We are grateful to Ray Barrell, Andy Blake and Garry Young for helpful comments.

References

Blake AP and Westaway PF (1993), ‘Why have UK consumption functions broken down?’, National Institute Discussion Paper No. 38.Google Scholar
Blake AP and Westaway PF (1994), ‘Small samples and structural change: a simulation study of consumption’. National Institute Discussion Paper No. 63.Google Scholar
Britton, A. (1991), Macroeconomic Policy in Britain 1974-87, Cambridge University Press.Google Scholar
Britton, A. and Pain, N. (1992), Econonaic Forecasting in Britain, National Institute Report Series No. 4.Google Scholar
Carruth, A. and Henley, A. (1990), ‘The housing market and consumer spending’, Fiscal Studies, No. 11, pp 27–38.Google Scholar
Carruth, A. and Henley, A. (1992), ‘Consumer durables spending and housing market activity’, Scottish Journal of Political Economy, No. 39, pp261–271.Google Scholar
Cuthbertson, K. (1980), ‘The determination of expenditure on consumer durables’, National Institute Economic Review, No. 94, pp 62–72.Google Scholar
Darby, J. and Ireland, J. (1993), ‘Consumption, forward looking behaviour and financial deregulation’, presented to ESRC Macroeconomic Modelling Bureau Conference, Warwick University, July 1993.Google Scholar
Dicks MJ (1990), ‘A simple model of the housing market’, Bank of England Discussion Paper No. 49.Google Scholar
Ermisch, J. and Westaway PF (1990), ‘The dynamics of aggregate consumption in an open economy life cycle model’, National Institute Discussion Paper No. 190, Scottish Journal of Political Economy, forthcoming (1994).CrossRefGoogle Scholar
Gurney, A. (1988), ‘The exchange rate, interest rates and the current balance in a forward looking model’, National Institute Economic Review, No. 125, pp 40–46.Google Scholar
Holmans AE (1991), ‘Estimates of housing equity withdrawal by owner occupiers in the United Kingdom, 1970 to 1990’, Government Economic Service Working Paper No. 116.Google Scholar
Holmes MJ (1993), ‘Housing equity withdrawal and the average propensity to consume’, Applied Economics, No. 25, 1315–1322.CrossRefGoogle Scholar
Kilpatrick, A. (1991), ‘The performance of broad money’, Treasury Bulletin, Autumn 1991.Google Scholar
Meen GP (1990), ‘The measurement of mortgage market constraints and the implications for econometric modelling of UK house prices’, Oxford Bulletin of Economics and Statistics, No. 52, pp 1–23.Google Scholar
Melliss, C., Meen, G., Pain, N. and Whittaker, R. (1989), ‘The new Treasury model project’, Government Economic Service Working Paper, No. 106.Google Scholar
Miles, D. (1992a), ‘Housing and the wider economy in the short and long run’, National Institute Economic Review, No. 139, pp 64–77.CrossRefGoogle Scholar
Miles, D. (1992b), ‘Housing markets, consumption and financial liberalisation in the major economies’, European Econonaic Review, No. 36, pp 1093–1136.CrossRefGoogle Scholar
Muellbauer, J. and Murphy, A. (1989), ‘Why has UK personal saving collapsed?’, Credit Suisse First Boston Research Paper, July 1989.Google Scholar
NIESR (1994), National Institute Domestic Econometric Model Manual, National Institute of Economic and Social Research, May 1994.Google Scholar
Pagan, A. (1989), ‘On the role of simulation in the statistical evaluation of econometric models’, Journal of Econometrics, No. 40, pp 125–140.Google Scholar
Pain, N. (1994), ‘The Economic Impact of the 1993 Budgets’, National Institute Economic Review, No. 147.Google Scholar
Pain, N. and Westaway PF (1994), ‘Housing, consumption and borrowing: an econometric model of personal sector behaviour’, GES Working Paper forthcoming.CrossRefGoogle Scholar
Patterson KD (1993), ‘Consumers' expenditure on nondurables and services and housing equity withdrawal in the United Kingdom’, University of Reading Discussion Papers in Quantitative Economics and Computing, Series E vol II, No. 8.Google Scholar
Sargent JR (1991), ‘Deregulation, debt and downturn in the UK economy’, National Institute Economic Review, No. 137, pp 75–88.Google Scholar
Tsoukis, C. and Westaway PF (1994), ‘A forward-looking model of housing construction in the UK’, Economic Modelling, No. 11, pp 266–279.Google Scholar
Wallis KF and Whitley JD (1992), ‘Counterfactual analysis with macroeconometric models: the UK economy 1979-84’, ESRC Macroeconomic Modelling Bureau Discussion Paper No. 29.Google Scholar
Westaway PF (1989), ‘Modelling consumers' expenditure in the UK: a disposable funds approach’, presented at European Economic Association Conference, Lisbon, 1990.Google Scholar
Westaway PF (1992), ‘A simulation model of consumer spending and housing demand’, National Institute Discussion Paper No. 15.Google Scholar
Westaway PF (1993), ‘A micro to macro model of personal sector behaviour’, paper presented to HM Treasury Academic Panel, AP(93)8.Google Scholar
Westaway PF (1994), ‘Mortgage equity withdrawal: causes and consequences’, National Institute Discussion Paper No. 59.Google Scholar