Greenspan paper: home equity loans raise spending

According to a paper co-authored by former Federal Reserve chairman Alan Greenspan, US spending could have been raised by about 3 percent a year in recent years with home owners using equity from their properties.

"From 1991 to 2000, equity extraction financed an average of 0.6 percent of total PCE [personal consumption expenditure], but since then that share has risen to almost 1-3/4 percent," they noted in the paper, released by the Fed.

Greenspan wrote the paper with Fed economist James Kennedy

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