Home About Latest Browse RSS Advanced Search

Federal Reserve Bank of Boston
Working Papers
Housing and debt over the life cycle and over the business cycle
Matteo Iacoviello
Marina Pavan
Abstract

This paper describes an equilibrium life-cycle model of housing where nonconvex adjustment costs lead households to adjust their housing choice infrequently and by large amounts when they do so. In the cross-sectional dimension, the model matches the wealth distribution; the age profiles of consumption, homeownership, and mortgage debt; and data on the frequency of housing adjustment. In the time-series dimension, the model accounts for the procyclicality and volatility of housing investment, and for the procyclical behavior of household debt.


Download Full text
Download Full text
Cite this item
Matteo Iacoviello & Marina Pavan, Housing and debt over the life cycle and over the business cycle, Federal Reserve Bank of Boston, Working Papers 09-12, 2009.
More from this series
JEL Classification:
Subject headings:
Keywords: Housing ; Mortgage loans
For corrections, contact Catherine Spozio ()
Fed-in-Print is the central catalog of publications within the Federal Reserve System. It is managed and hosted by the Economic Research Division, Federal Reserve Bank of St. Louis.

Privacy Legal