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Nominal Mortgage Contracts and the Effects of Inflation on Portfolio Allocation
Nichols, Joseph - 2008
Households who wish to extract home equity through refinancing their mortgage face a hidden transaction cost. The real … value of the fixed nominal mortgage payment declines over time with inflation. The change in the real value of the mortgage … payments from taking on a new mortgage is positive and an increasing function of inflation; higher inflation thus discourages …
Persistent link: https://www.econbiz.de/10014216526
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Are Adjustable-Rate Mortgage Borrowers Borrowing Constrained?
Johnson, Kathleen - 2011
Past research argues that changes in adjustable-rate mortgage (ARM) payments may lead households to cut back on … constrained. Although the demographic and financial characteristics of ARM and fixed-rate mortgage (FRM) borrowers are quite …
Persistent link: https://www.econbiz.de/10013124982
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Paying Too Much? Price Dispersion in the U.S. Mortgage Market
Bhutta, Neil; Fuster, Andreas; Hizmo, Aurel - 2020
We document wide dispersion in the mortgage rates that households pay on identical loans, and show that borrowers … percentile mortgage rate that borrowers with the same characteristics obtain for identical loans, in the same market, on the same … direct evidence that financial knowledge and shopping both affect the mortgage rates borrowers get, and that shopping …
Persistent link: https://www.econbiz.de/10014048780
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Stock Market Investment : The Role of Human Capital
Athreya, Kartik - 2016
Participation in the stock market is limited, especially early in life. By contrast, human capital investment is widespread, especially early in life. Returns to equity are constant across households, while returns to human capital vary. The contribution of this paper is to demonstrate that once...
Persistent link: https://www.econbiz.de/10013003301
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Fertility Choice in a Life Cycle Model with Idiosyncratic Uninsurable Earnings Risk
Sommer, Kamila - 2014
This paper studies the link between rising income uncertainty and household fertility patterns in an Aiyagari-Bewley-Huggett framework augmented to include fertility decisions and infertility risk. Building on Becker and Tomes (1976), I model fertility decisions as sequential, irreversible...
Persistent link: https://www.econbiz.de/10013054123
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Optimal public debt with life cycle motives
Peterman, William B.; Sager, Erick - 2018
Public debt can be optimal in standard incomplete market models with infinitely lived agents, since the associated capital crowd-out induces a higher interest rate. The higher interest rate encourages individuals to save and, hence, better self-insure against idiosyncratic labor earnings risk....
Persistent link: https://www.econbiz.de/10011927171
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How Much are Car Purchases Driven by Home Equity Withdrawal?
McCully, Brett - 2020
Previous research indicates that changes in housing wealth affect consumer spending on cars. We find that home equity extraction plays only a small role in this relationship. Consumers rarely use funds from equity extraction to purchase a car directly, even during the mid-2000s housing boom;...
Persistent link: https://www.econbiz.de/10012855857
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The Finances of American Households in the Past Three Recessions : Evidence from the Survey of Consumer Finances
Moore, Kevin B. - 2011
The downturn in economic activity in the U.S. that began in December 2007 (as determined by researchers with the National Bureau of Economic Research) has been noticeably deeper and has already lasted considerably longer than the prior two recessions - those beginning in July 1990 and in March...
Persistent link: https://www.econbiz.de/10013128716
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The Effect of Self-Reported Transitory Income Shocks on Household Spending
Sabelhaus, John - 2012
We use repeated cross-sections of the Survey of Consumer Finances (SCF) to study the effect of self-reported transitory income shocks on household food spending. The self-reported shocks in the SCF are derived from survey questions about the gap between actual and "normal" income. This approach...
Persistent link: https://www.econbiz.de/10013096020
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Gamblers as Personal Finance Activists
Li, Geng - 2012
Gambling behavior can serve as an informative indicator of important household heterogeneity that is difficult to observe directly in data. We present, to the best of our knowledge, the first comprehensive study of the consumption and personal finance of gamblers using a nationwide...
Persistent link: https://www.econbiz.de/10013106836