This article presents a monthly vector autoregressive (VAR) model of housing prices, the federal funds rate, foreclosures, the unemployment rate and the mortgage interest rate for the United States for the period of 2000(1)--2010(8). Impulse response functions show that negative shocks to the...

This article is a theoretical examination of optimal leverage to maximize the value of an investment asset, assuming that the interest rate on loans increases with leverage. The expected rate of return to equity for the investing firm (that is subject to taxation at the entity level) and market...