The present period of financial instability is also likely to become known as the end of an era, an era of economic calm and of policy consensus on how to maintain market stability. After World War II, the federal government operated on the Keynesian principles that the right mix of spending,...

This article describes the causes of the boom and bust in the U.S. housing market, which brought down not just the U.S. financial system but the global economy. How did this vicious cycle begin? How did home prices appreciate so far and so fast? Why did rational investors not recognize and stop...

With private-label mortgage-backed securities (MBS), investors bore default risk; while this risk should have been priced, as systemic risk grew, the pricing of risk did not increase. This paper attempts to explain why this happened. We point to market institutions' incentive misalignments that...

Mounting foreclosures and recent disclosures of abusive lending practices have led many states to adopt new anti-predatory lending laws. Researchers have examined the impact of such laws on credit flows and the cost of credit. This research extends the literature by examining if the market...

Inclusionary housing and community land trusts (CLTs) are two mechanisms used to increase the stock of affordable housing. This chapter examines the potential of these mechanisms to provide long-term (“durably”) affordable housing in the United States, where there is strong local government...

This paper provides the first estimates of housing price movements for Beijing in late pre-modern China. We hand-collect from archival sources transaction prices and other house attribute information from the 498 surviving house sale contracts for Beijing during the first two centuries of the...

The impact of borrowing constraints on homeownership has been well established in the literature. Wealth is most likely to restrict homeownership followed by credit and income. Using recent movers from the 1979 National Longitudinal Survey of Youth and borrowing constraint definitions commonly...

Asset bubbles come and go. Only the housing bubble, however, brought the economy to its knees. Why? What makes housing uniquely a cause of macroeconomic risk? This article examines the workings of the housing market as well as theories and empirical evidence about the housing bubble. It explains...

This paper presents summary statistics and a preliminary analysis of the success rate of loan modifications made in 2010 and January 2011 to residential mortgages securitized in private-label residential mortgage-backed securities. We find that these more recent private-label loan modifications...

Two parallel real estate bubbles emerged in the United States between 2004 and 2008, one in residential real estate, the other in commercial real estate. The residential real estate bubble has received a great deal of popular, scholarly, and policy attention. The commercial real estate bubble,...