Search Results
Speech
The Great Recession
Presented on September 10, 2010 at Bentley University to the Financial Planning Association of Massachusetts.
Monograph
Labor supply in the new century
To explore the labor-supply trends that will affect economic policymaking in the twenty-first century, the Federal Reserve Bank of Boston chose "Labor Supply in the New Century? as the theme for its 52nd Annual Economic Conference held in June 2007. The conference?s six papers and its keynote address by Eugene Steuerle provide a broad overview of the quantity and quality implications of labor-supply trends.
Discussion Paper
Why did so many people make so many ex post bad decisions?: the causes of the foreclosure crisis
This paper presents 12 facts about the mortgage market. The authors argue that the facts refute the popular story that the crisis resulted from financial industry insiders deceiving uninformed mortgage borrowers and investors. Instead, they argue that borrowers and investors made decisions that were rational and logical given their ex post overly optimistic beliefs about house prices. The authors then show that neither institutional features of the mortgage market nor financial innovations are any more likely to explain those distorted beliefs than they are to explain the Dutch tulip bubble ...
Monograph
U. S. labor supply in the twenty-first century
The American labor force will be transformed as the twenty-first century unfolds, a change that will confront policymakers and business firms with new challenges and new opportunities. The impending slowdown of labor force growth that will accompany the retirement of the baby boom generation already is playing a central role in national debates over the future solvency of Social Security and Medicare, as well as U.S. immigration policies. But labor supply changes will be influenced by other dimensions as well. In the coming decades, American workers are likely to be, on average, older and ...
Working Paper
Cross-sectional patterns of mortgage debt during the housing boom: evidence and implications
The reallocation of mortgage debt to low-income or marginally qualified borrowers plays a central role in many explanations of the early 2000s housing boom. We show that such a reallocation never occurred, as the distribution of mortgage debt with respect to income changed little even as the aggregate stock of debt grew rapidly. Moreover, because mortgage debt varies positively with income in the cross section, equal percentage increases in debt among high- and low-income borrowers meant that wealthy borrowers accounted for most new debt in dollar terms. Previous research stressing the ...
Discussion Paper
Reasonable people did disagree : optimism and pessimism about the U.S. housing market before the crash
Understanding the evolution of real-time beliefs about house price appreciation is central to understanding the U.S. housing crisis. At the peak of the recent housing cycle, both borrowers and lenders appealed to optimistic house price forecasts to justify undertaking increasingly risky loans. Many observers have argued that these rosy forecasts ignored basic theoretical and empirical evidence that pointed to a massive overvaluation of housing and thus to an inevitable and severe price decline. We revisit the boom years and show that the economics profession provided little such ...
Discussion Paper
Subprime facts: what (we think) we know about the subprime crisis and what we don’t
Using a variety of datasets, we document some basic facts about the current subprime crisis. Many of these facts are applicable to the crisis at a national level, while some illustrate problems relevant only to Massachusetts and New England. We conclude by discussing some outstanding questions about which the data, we believe, are not yet conclusive.
Working Paper
Technological innovation in mortgage underwriting and the growth in credit, 1985–2015
The application of information technology to finance, or ?fintech,? is expected to revolutionize many aspects of borrowing and lending in the future, but technology has been reshaping consumer and mortgage lending for many years. During the 1990s, computerization allowed mortgage lenders to reduce loan-processing times and largely replace human-based assessments of credit risk with default predictions generated by sophisticated empirical models. Debt-to-income ratios at origination add little to the predictive power of these models, so the new automated underwriting systems allowed higher ...
Working Paper
The Impact of the Age Distribution on Unemployment: Evidence from US States
Economists have studied the potential effects of shifts in the age distribution on the unemployment rate for more than 50 years. Most of this analysis uses a “shift-share” method, which assumes that the demographic structure has no indirect effects on age-specific unemployment rates. This paper uses state-level data to revisit the influence of the age distribution on unemployment in the United States. We examine demographic effects across the entire age distribution rather than just the youth share of the population—the focus of most previous work—and extend the date range of analysis ...
Conference Paper
U. S. labor supply in the twenty-first century
The American labor force will be transformed as the twenty-first century unfolds, a change that will confront policymakers and business firms with new challenges and new opportunities. The impending slowdown of labor force growth that will accompany the retirement of the baby boom generation already is playing a central role in national debates over the future solvency of Social Security and Medicare, as well as U.S. immigration policies. But labor supply changes will be influenced by other dimensions as well. In the coming decades, American workers are likely to be, on average, older and ...