Credit Conditions and Consumption, House Prices and Debt: What Makes Canada Different?

Date: 01 November 2015

There is widespread agreement that, in the United States, higher house prices raise consumption via collateral or possibly wealth effects. The presence of similar channels in Canada would have important implications for monetary policy transmission. We trace the impact of shifts in non-price household credit conditions through joint estimation of a system of error-correction equations for Canadian aggregate consumption, house prices and mortgage debt. We find strong evidence that, after controlling for income ...

John Muellbauer Pierre St-Amant David Williams

Economic Modelling Employment, Equity and Growth

Credit Conditions and Consumption, House Prices and Debt: What Makes Canada Different?


Type: working-paper

Muellbauer, J., St-Amant, P. & Williams, D. (2015). 'Credit Conditions and Consumption, House Prices and Debt: What Makes Canada Different?'. Bank of Canada Staff Working Paper 2015-40.


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