Hedlund, Aaron - In: Quantitative economics : QE ; journal of the … 7 (2016) 1, pp. 289-328
This paper quantitatively accounts for the cyclical dynamics of key macroeconomic housing and mortgage market variables … using a tractable, searchtheoretic model of housing with equilibrium mortgage default. To explain these dynamics, the model … constraints. During housing busts, longer selling times spill over into higher foreclosure risk, thereby magnifying the response …