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Journal Article
Mortgage foreclosure prevention efforts
In 2007, the United States began to experience its worst housing and foreclosure crisis since the Great Depression. In response, policymakers have been devising foreclosure prevention plans, most of which focus on loan modifications. ; This article begins with an overview of the different loss mitigation tools that mortgage lenders and policymakers have used in the past to combat foreclosure and then briefly summarizes the main U.S. programs of the past few years. By most analyses, the authors note, these recent programs have had poor results in terms of significantly reducing foreclosures, ...
Journal Article
Largest Texas Metros Lure Big-City, Coastal Migrants During Pandemic
Almost two years since the pandemic began, high-frequency data show that migration to Texas has accelerated, as the state’s four biggest metros experience an influx of migrants often from the nation’s largest metropolitan areas. The emergence of working from home has lessened both workers’ and some companies’ reliance on physical offices, clearing the way for the new wave of mobility.
Working Paper
Investing in the Shadows: FinTech Growth and Mortgage Market Dynamics
The adoption of new technologies is widely viewed as a key driver of the rapid growth of nonbanks in the U.S. mortgage market after the Global Financial Crisis (GFC). This paper studies technology investment by mortgage lenders and its implications for post-GFC market structure. Using a new dataset on lender-level technology investment merged with loan origination records and balance-sheet information, we document that technology-related human capital investment has risen over time, driven disproportionately by banks and larger lenders, and that such investment predicts higher subsequent ...
Working Paper
Demographic Transition, Industrial Policies and Chinese Economic Growth
We build a unified framework to quantitatively examine how demographic transition and industrial policies have contributed to China’s economic growth in the past five decades. On the demographic side, we consider evolutions in government population-control policies, life expectancy and pension income replacement. Industrial policies include changes in the speed of the growth of entrepreneurship, industry-specific interest subsidies and financial intermediation costs. Our analyses suggest that the demographic transition alone barely affects the aggregate savings rate, mainly due to general ...
Working Paper
Demographic Transition, Industrial Policies and Chinese Economic Growth
We build a unified framework to quantitatively examine the demographic transition and industrial policies in contributing to China’s economic growth between 1976 and 2015. We find that the demographic transition and industrial policy changes by themselves account for a large fraction of the rise in household and corporate savings relative to total output and the rise in the country’s per capita output growth. Importantly, their interactions also lead to a sizable fraction of the increases in savings since the late 1980s and reduce growth after 2010. A novel and important factor that ...
Working Paper
Growth effects of progressive taxes
Criticisms of endogenous growth models with flat rate taxes have highlighted two features that are not substantiated by the data. These models generally imply: (1) that economic growth must fall with the share of government expenditures in output across countries, and (2) that one-time shifts in marginal tax rates should instantaneously lead to similar shifts in output growth. In contrast, we show that allowing for heterogeneous households and progressive taxes into otherwise conventional linear growth models radically changes these predictions. In particular, economic growth does not have to ...
Working Paper
Growth Effects of Progressive Taxation
Criticisms of endogenous growth models with flat rate taxes have highlighted two features that are not substantiated by the data. These models generally imply: (1) that economic growth must fall with the share of government expenditures in output across countries, and (2) that one-time shifts in marginal tax rates should instantaneously lead to similar shifts in output growth. In contrast, we show that allowing for heterogenous households and progressive taxes into otherwise conventional linear growth models radically changes these predictions. In particular, economic growth does not have to ...
Working Paper
Fresh start or head start? The effect of filing for personal bankruptcy on the labor supply
The key feature of the modern U.S. personal bankruptcy law is to provide debtors a financial fresh start through debt discharge. The primary justification for the discharge policy is to preserve human capital by maintaining incentives for work. In this paper, we test this fresh start argument by providing the first estimate of the effect of personal bankruptcy filing on the labor supply using data from the Panel Study of Income Dynamics (PSID). Our econometric approach controls for the endogenous self-selection of bankruptcy filing and allows for dependence over time for the same household. ...
Working Paper
The Dynamics of Adjustable-Rate Subprime Mortgage Default: A Structural Estimation
We present a dynamic structural model of subprime adjustable-rate mortgage (ARM) borrowers making payment decisions taking into account possible consequences of different degrees of delinquency from their lenders. We empirically implement the model using unique data sets that contain information on borrowers' mortgage payment history, their broad balance sheets, and lender responses. Our investigation of the factors that drive borrowers' decisions reveals that subprime ARMs are not all alike. For loans originated in 2004 and 2005, the interest rate resets associated with ARMs, as well as the ...
Report
An anatomy of U.S. personal bankruptcy under Chapter 13
We build a structural model of Chapter 13 bankruptcy that captures salient features of personal bankruptcy under Chapter 13. We estimate our model using a novel data set that we construct from bankruptcy court dockets recorded in Delaware in 2001 and 2002. Our estimation results highlight the importance of debtor?s choice of repayment plan length for Chapter 13 outcomes under the restrictions imposed by the bankruptcy law. We use the estimated model to conduct policy experiments to evaluate the impact of more stringent provisions of Chapter 13 that impose additional restrictions on the length ...