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We use a quantitative equilibrium model with houses, collateralized debt and foreign borrowing to study the impact of global imbalances on the U.S. economy in the 2000s. Our results suggest that the dynamics of foreign capital flows account for between one fourth and one third of the increase in...
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cycle cannot be accounted for by the liberalization and subsequent tightening of mortgage credit standards that occurred …
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commuting, and about how much to spend on a mortgage. By matching the results to data (at the ZIP-code level) about relative … commuting, and they find that people who live in the high-decline areas believe it is appropriate to spend more on a mortgage. …
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separate trends: a sharp fall in the asset acquisition of American households in the 1990s, and an explosion of mortgage …. The mortgage boom was financed by the US financial sector, which intermediated foreign funds from ‘private’ sources. …
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