We model Continuous Workout Mortgages (CWMs) in an economic environment with refinancings and prepayments by employing a market-observable variable such as the house price index. Our main results include: (a) explicit modelling of repayment and interest-only CWMs; (b) closed form formulae for...

It is well-established that the thickness of large cities' markets can enhance entrepreneurial activity (Vernon (1960)). It has been more recently established that because they carry out so many different tasks, a balance of skills may be beneficial to entrepreneurs (Lazear (2004, 2005)). This...

Retail leases, both inside and outside shopping centers, commonly include percentage rent above a breakpoint. The breakpoint is high relative to sales when initial leases are signed. Percentage rents are higher for categories of stores with higher profit margins and lower volumes. These and...

Mortgage underwriting process that sorts heterogeneous borrowers into different risk groups according to observable characteristics of borrowers does not reveal sufficient information to segregate pooling risks in mortgages. Do borrowers always choose rationally mortgage contracts that minimize...

The objective of this paper is to show how the same market failures that contribute to urban sprawl also contribute to urban blight. The paper develops a simple dynamic model in which new suburban and older central-city properties compete for mobile residents. The level of housing services...

This paper seeks to explore how the relationships among interest rates, user cost of capital and housing price dynamics vary across countries with different mortgage financing arrangements and housing supply systems. The paper starts with a survey of the theoretical and empirical literature on...