Much of the increase between 1995 and 2005 is due to a rise in the value of housing collateral.
But even if that is correct, house-price increases may still have an impact as they create housing collateral for consumers who could not otherwise borrow.
He estimates that every extra dollar of housing collateral now translates into six or seven cents a year of extra consumer spending, compared with only three pence in the pound in Britain.Institutional differences may explain the gap.
As Lord (Adair) Turner, the former chair of the Financial Services Authority, argues in his new book Between Debt and the Devil, bank mortgage lending secured on housing collateral is inherently pro-cyclical.
Then bank agents tried to talk the customer into refinancing, using the house as collateral.
Mr. Abulu even took out a loan using his mother's house as collateral.
One Hungarian bank obliged, charging interest at 37.5% and taking the family house as collateral.
The balance was borrowed from friends and relatives, as well as a loan taken out using his house as collateral.
The second stipulation would require that he post his house as collateral, something that seemed especially risky to a 60-year-old man.
Solicitations for easy loans, using one's house as collateral, came in the mail, in telephone calls, and sometimes from door-to-door hucksters.
He was fascinated, he said, that the client said he would not dare flee because a bondsman held his mother's house as collateral.
