This paper examines the welfare cost of rare housing disasters characterized by large drops in house prices. I … construct an overlapping generations general equilibrium model with recursive preferences and housing disaster shocks. The … likelihood and magnitude of housing disasters are inferred from historic housing market experiences in the OECD. The model shows …

Should monetary policy lean against housing market booms? We approach this question using a small-scale, regime …-switching New Keynesian model, where housing market crashes arrive with a logit probability that depends on the level of household …

the United States, housing collateral effects on consumption are absent. Given credit conditions, rising house prices … mostly explained by movements in incomes, housing supply, mortgage interest rates and credit conditions, suggesting that the …

adverse aggregate housing shock, these banks fail. When banks do not fully internalize the losses from such failure (due to … and individuals with large non-housing wealth suffer from the fragility of the banking system. On the other hand, some …