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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
Accounting for changes in the homeownership rate
After three decades of being relatively constant, the homeownership rate increased over the 1994?2005 period to attain record highs. The objective of this paper is to account for the observed boom in ownership by examining the role played by changes in demographic factors and innovations in the mortgage market that lessened down payment requirements. To measure the aggregate and distributional impact of these factors, we construct a quantitative general equilibrium overlapping-generation model with housing. We find that the long-run importance of the introduction of new mortgage products for ...
Working Paper
The tax treatment of homeowners and landlords and the progressivity of income taxation
This paper analyzes the connection between the asymmetric tax treatment of homeowners and landlords and the progressivity of income taxation using a quantitative overlapping generations general equilibrium model with housing and rental markets. Our model emphasizes the determinants of tenure choice (owning versus renting) and the household decision to supply housing services to the rental market. This formulation breaks the link between the rental price and the equilibrium interest rate. Hence, the aggregate supply of rental property responds differently to the direction of rental price ...
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.
Journal Article
Mortgage Debt Continues to Decline While Auto Lending Soars
Auto and student loans remained the fastest growing consumer debt categories in the second quarter, a Center for Household Financial Stability report states.
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
Developments in Household Debt in Eighth District MSAs
Growth in household debt, a major contributing factor to the Great Recession, has led many to worry that a debt crisis is on the horizon. Although the levels of certain types of debt are rising in the MSAs of the Eighth Federal Reserve District, serious delinquency rates have not yet reached alarming levels.
Journal Article
On Corporate Income Taxes, Employment, and Wages
The passage of the Tax Cuts and Jobs Act of 2017 has resulted in debate on whether the decline in personal and corporate income tax rates will increase employment, income, and wages.
Journal Article
Do Firms Switch Their Legal Form of Organization When Taxes Change?
Tax-law changes can cause firms to change their organizational structure.