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Do households use home-ownership to insure themselves? Evidence across U.S. cities

Amior, Michael; Halket, Jonathan - London School of Economics (LSE) - 2014

Are households more likely to be homeowners when “housing risk” is higher? We show that home-ownership rates and loan-to-value (LTV) ratios at the city level are strongly negatively correlated with local house price volatility. However, causal inference is confounded by house price levels,...

Persistent link: https://www.econbiz.de/10011126690

Mortgages and monetary policy

Garriga, Carlos; Kydland, Finn E.; Šustek, Roman - London School of Economics (LSE) - 2013

Mortgage loans are a striking example of a persistent nominal rigidity. As a result, under incomplete markets, monetary … policy affects decisions through the cost of new mortgage borrowing and the value of payments on outstanding debt. Observed …

Persistent link: https://www.econbiz.de/10011126379

Modelling and forecasting UK mortgage arrears and possessions

Aron, Janine; Muellbauer, John - London School of Economics (LSE) - 2010

This paper presents new models for aggregate UK data on mortgage possessions (foreclosures) and mortgage arrears … scenarios for forecasts to 2013 reveals the sensitivity of mortgage possessions and arrears to different economic conditions …, highlighting potential risks faced by the UK and its mortgage lenders. A comprehensive review of data on arrears and possessions …

Persistent link: https://www.econbiz.de/10011126430

Imperfect capital markets and persistence of initial wealth inequalities

Piketty, Thomas - London School of Economics (LSE) - 1992

We consider an infinite-horizon inter-generational economy with identical agents differing only in their inherited wealth and with a constant-returns-to-scale technology using capital and labour (called "effort") and displaying a purely idiosyncratic risk. If effort is contractible, full...

Persistent link: https://www.econbiz.de/10010746576

Are there any Animal Spirits behind the Scenes of the Euro area Sovereign Debt Crisis?

Mamatzakis, Emmanuel - London School of Economics (LSE) - 2013

This paper reveals the underlying market’s preferences over the on going Euro area sovereign debt crisis. It builds on a loss function with reference to the ‘basis’, the difference between the spread over swap and Credit Default Swap (CDS) for sovereign bonds. This loss function is general...

Persistent link: https://www.econbiz.de/10010686658

Debt and incomplete financial markets: a case for nominal GDP targeting

Sheedy, Kevin D. - London School of Economics (LSE) - 2013

Financial markets are incomplete, thus for many agents borrowing is possible only by accepting a financial contract that specifies a fixed repayment. However, the future income that will repay this debt is uncertain, so risk can be inefficiently distributed. This paper argues that a monetary...

Persistent link: https://www.econbiz.de/10010746283

James Tobin : an appreciation of his contribution to economics

Buiter, Willem H. - London School of Economics (LSE) - 2003

Jim Tobin, who died on March 11, 2002 at the age of 84, was one of giants of economics of the second half of the twentieth century and the greatest macroeconomist of his generation. Tobin’s influence on macroeconomic theory is so pervasive - so much part of our professional ‘acquis’ - that...

Persistent link: https://www.econbiz.de/10011071326

Household finance and the welfare state: a case study of the United States, 1980-2010

Gerba, Eddie; Schelkle, Waltraud - London School of Economics (LSE) - 2014

The sharp rise in household finance, both in debt and in assets, is one of the striking empirical facts about the US economy of the last two decades. But it is still not clear what caused it. Economists, both mainstream and heterodox, seek an explanation in financial market innovation and...

Persistent link: https://www.econbiz.de/10011126600

The role of bank capital and the transmission mechanism of monetary policy

Sunirand, Pojanart - London School of Economics (LSE) - 2002

This paper is a theoretical study of the transmission mechanism of monetary policy in the presence of an endogenous role of bank capital. The basic framework is a standard Dynamic New Keynesian model with price stickiness modified so as firms as well as banks face endogenous financial frictions...

Persistent link: https://www.econbiz.de/10010884669

Cyclical adjustment of capital requirements: a simple framework

Repullo, Rafael - London School of Economics (LSE) - 2013

We present a model of an economy with heterogeneous banks that may be funded with uninsured deposits and equity capital. Capital serves to ameliorate a moral hazard problem in the choice of risk. There is a fixed aggregate supply of bank capital, so the cost of capital is endogenous. A regulator...

Persistent link: https://www.econbiz.de/10011171760

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