Liquidity and Consumption. Evidence from three Post-earthquakes Reconstruction Programs in Italy

Antonio Acconcia (), Giancarlo Corsetti and Saverio Simonelli
Additional contact information
Antonio Acconcia: Università di Napoli Federico II and CSEF

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: Exploiting three earthquakes as quasi-experiments, we analyze the response of homeowners’ consumption to public programs financing the costs of housing reconstruction, which increase households’ liquidity significantly in the short run. Although over a multi-year horizon consumption is unaffected, upfront disbursement of funds has a sizable impact on the nondurable consumption of households with low liquidity and bank debt (‘wealthy-handto- mouth’); it makes no difference for liquid households. The consumption of both groups of households is instead insensitive to funds paid directly to firms for reconstruction work, rather than channeled trough households.

Keywords: Consumption; Liquidity; Mortgage; Quasi-experiment (search for similar items in EconPapers)
JEL-codes: E21 E62 (search for similar items in EconPapers)
Date: 2015-03-25, Revised 2018-05-16
New Economics Papers: this item is included in nep-eur and nep-mac
Note: This is a substantially revised version of a paper previously circulated with the title “The Consumption Response to Liquidity-Enhancing Transfers: Evidence from Italian Earthquakes”
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Forthcoming in American Economic Journal: Macroeconomics

Downloads: (external link)
http://www.csef.it/WP/wp396.pdf (application/pdf)

Related works:
Journal Article: Liquidity and Consumption: Evidence from Three Post-earthquake Reconstruction Programs in Italy (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sef:csefwp:396

Access Statistics for this paper

More papers in CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy Contact information at EDIRC.
Bibliographic data for series maintained by Dr. Maria Carannante ().