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Journal Article
Consumer Debt Growth Stalls Despite Strong Sectors
The upward trend in per capita consumer debt slowed in the third quarter of 2016.
Journal Article
Mortgage innovation, mortgage choice, and housing decisions
This paper examines some of the more recent mortgage products now available to borrowers. The authors describe how these products differ across important characteristics, such as the down payment requirement, repayment structure, and amortization schedule. The paper also presents a model with the potential to analyze the implications for various mortgage contracts for individual households, as well as to address many current housing market issues. In this paper, the authors use the model to examine the implications of alternative mortgages for homeownership. The authors use the model to show ...
Working Paper
Exchange rates and international relative prices and quantities in equilibrium models with alternative preference specifications
Dynamic open economy models with time-separable, deterministic utilities fail to account for observed dynamics of exchange rates and international relative prices and quantities. This paper examines the ability of extensions of existing open economy models to account for exchange rates, international relative prices, and international trade quantities. The extensions involve preferences with taste shocks and nontime-separable utilities in habit persistence form. Quantitative properties of calibrated versions of the models are examined in light of time series properties of key international ...
Journal Article
Consumer Debt Rises for 10th Quarter in a Row
For a long time after the recession, consumers shed debt. But it?s growing again ? up 2.1 percent from the first quarter last year.
Working Paper
Equilibrium mortgage choice and housing tenure decisions with refinancing
The last decade has brought about substantial mortgage innovation and increased refinancing. The objective of this paper is to understand the determinants and implications of mortgage choice in the context of a general equilibrium model with incomplete markets. The equilibrium characterization allows us to study the impact of mortgage financing decisions in the productive economy. We show the influence of different contract characteristics such as the down payment requirement, repayment structure, and the amortization schedule for mortgage choice. We find that loan products that allow for low ...
Working Paper
Corporate Income Tax, Legal Form of Organization, and Employment
A dynamic stochastic occupational choice model with heterogeneous agents is developed to evaluate the impact of a corporate income tax reduction on employment. In this framework, the key margin is the endogenous entrepreneurial choice of the legal form of organization (LFO). A reduction in the corporate income tax burden encourages adoption of the C corporation legal form, which reduces capital constraints on ?rms. Improved capital re-allocation increases overall productive e?ciency in the economy and therefore expands the labor market. Relative to the benchmark economy, a corporate income ...
Journal Article
Debt Levels Continue to Grow in Eighth District’s Key Metro Areas
Consumers keep borrowing, but delinquency rate data do not appear to signal a severe debt problem on the horizon.
Journal Article
The Homeownership Experience of Minorities During the Great Recession
It has been argued that during the Great Recession, wealth losses were more concentrated for college-educated Black and Hispanic families than for White and Asian college-educated families and their non-college-educated Black and Hispanic peers. This article explores the extent to which the homeownership experience for families who purchased homes between 2004 and 2008 is a potentially important factor in explaining this finding. During the housing boom, the increase in homeownership for Blacks and Hispanics was very similar, but the second group had a smaller decline. Despite these ...
Discussion Paper
Liquidity and real activity in three monetary models
This paper investigates interest rate determination and evolutions of nominal and real variables in alternative monetary, general equilibrium models. Three approaches to characterizing monetary transactions services are utilized: a cash-in-advance approach, in which agents face cash constraints on goods purchases; a transaction-cost approach, in which goods are sacrificed in transactions; and a shopping-time approach, in which leisure is sacrificed in transactions. Models which employ these approaches are used to examine liquidity effects of monetary innovations on interest rates and real ...