rate mortgages ranges from less than 20 % in france and germany to more than 80 % in luxembourg, the netherlands, portugal and slovakia ( see ehrmann and ziegelmeyer ( 2013 ) ). the great variety of households revealed by household - level data stands in sharp contrast to the stark representation of consumers in many dsge models ( especially those of the first generation ), in which consumption smoothing or intertemporal substitution is typically governed by a single parameter that is often calibrated in an ad hoc manner. the experience of the great recession, in which individual households were subject to different income, interest rate and wealth shocks that generated responses that differed from those recorded in previous recessions, suggests that we should take household heterogeneity seriously. to conclude, the eurosystem ’ s household finance and consumption survey provides researchers with an invaluable source of information that will make it possible, by way of a cross - country perspective, to enhance our knowledge about the effects of specific monetary policy measures on the financial and economic decisions taken by households. thank you for your attention. for example, ehrmann and ziegelmeyer ( 2013 ) estimate that a 300 basis point cut in interest rates would result in a substantial reduction of the median debt - service burden, in particular for households in the lowest income quintile where the ratio of median debt service to income would otherwise have been 44 %, rather than the observed 32 %. bis central bankers ’ speeches references anderson, e., inoue, a. and rossi, b. ( 2013 ), “ heterogeneous consumers and fiscal policy shocks ”, cepr discussion papers, no 9631, centre for economic policy research. blundell, r., pistaferri, l. and preston, i. ( 2008 ), “ consumption inequality and partial insurance ”, american economic review, no 98 ( 5 ), pp. 1887 – 1921. blundell, r., pistaferri, l. and saporta - eksten, i. ( 2012 ), “ consumption inequality and family labor supply ”, nber working papers, no 18445, national bureau of economic research. broda, c. and parker, j. ( 2012 ), “ the economic stimulus payments of 2008 and the aggregate demand for consumption ”, mimeo, northwestern university. carroll, c., slacalek, j. and tokuoka, k. (

have an only modest buffer of liquid assets that they can readily use if they experience adverse economic shocks. for example, the median value of net liquid assets in the euro area is 19 % of households ’ annual income, as shown in an extensive report on the results of the first wave of the hfcs ( hfcn ( 2013 ) ). consequently, many households may have to cut their spending quite substantially, especially when faced with large and persistent shocks like those that occurred during the great recession, a finding that would be in line with much of the research undertaken by richard blundell. of course, the response of households also depends on the availability of financial products that make it possible to extract equity from illiquid assets ( housing wealth ). this availability is limited in many european countries and, accordingly, the response of consumption to wealth shocks – the wealth effect – seems to be more modest than in the united states ( as much of the literature has found ). 3 however, in any case, households in many countries may currently find it difficult to smooth consumption because of the combination, size and persistence of the adverse shocks they have recently experienced : significant declines in house and stock prices, negative shocks to labour income and the substantial accumulation of debt. much of the evidence available, based on us data, 4 suggests that households which had accumulated a large stock of debt before the crisis respond disproportionately to adverse shocks, also because many are endeavouring to deleverage and reduce their debt burdens. the hfcs data document that debt participation and debt holdings vary substantially across countries, and seem to be related to institutional settings, such as the length of repossession periods, as again documented in the report on the hfcs ( hfcn ( 2013 ) ). this implies that the dynamics of aggregate spending and output vary across countries, depending not only on the size of shocks and their distribution across households, but also on the institutional settings, which may have affected the accumulation of debt and house price dynamics to a varying extent before the crisis. see carroll et al. ( 2013 ). see, for example, blundell, pistaferri and preston ( 2008 ), broda and parker ( 2012 ), kreiner, lassen and lethpetersen ( 2012 ) and jappelli and pistaferri ( 2013 ). see, for example, slacalek ( 2009 ). see, for example, dyna