inflation targeting. This way the central bank tries to address excessive household debt. While the merits of such policy have … freely adjust outstanding debt (refinancing) and (ii) dominant mortgage type in the economy (fixed or adjustable rate). I … their disposable income (hand-to-mouth) net of payments on long-term mortgage. I find that the optimal simple policy rule …

mortgage contract, in which differences in the borrower and the lender's risk preference jointly determine the equilibrium … commercial mortgage data provide generally supporting evidence for the predictions, and the evidence on counter-cyclical leverage …

Long-term fixed-rate mortgage contracts protect households against interest rate risk, yet most countries have … fixation length tracks the life-cycle decline of credit risk in the mortgage market: the loan-to-value (LTV) ratio decreases … using shorter-term contracts. To quantify demand for long-term contracts, I develop a life-cycle model of optimal mortgage …