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Keywords:Construction 

Working Paper
Understanding the Exposure at Default Risk of Commercial Real Estate Construction and Land Development Loans

We study and model the determinants of exposure at default (EAD) for large U.S. construction and land development loans from 2010 to 2017. EAD is an important component of credit risk, and commercial real estate (CRE) construction loans are more risky than income producing loans. This is the first study modeling the EAD of construction loans. The underlying EAD data come from a large, confidential supervisory dataset used in the U.S. Federal Reserve’s annual Comprehensive Capital Assessment Review (CCAR) stress tests. EAD reflects the relative bargaining ability and information sets of ...
Working Papers , Paper 2007

Journal Article
When Interstates Paved the Way: The construction of the Interstate Highway System helped to develop the U.S. economy

Econ Focus , Volume 26 , Issue 2/3Q , Pages 24-27

Working Paper
Shovel Ready Projects and Commercial Construction Activity’s Long and Variable Lags

We use microdata on the phases of commercial construction projects to document three facts regarding the sector's time-to-plan lags: (1) plan times are long and highly variable, (2) nearly half of projects in planning are abandoned, and (3) property price appreciation reduces the likelihood of abandonment. We write down a tractable model of endogenous planning starts and abandonment that can match these facts. The model also has the testable implication that supply is more elastic when there are more "shovel ready" projects ready for construction. We use local projections to validate this ...
Finance and Economics Discussion Series , Paper 2024-016r1

Working Paper
On Commercial Construction Activity's Long and Variable Lags

We use microdata on the phases of commercial construction projects to document three facts regarding time-to-plan lags: (1) plan times are long--about 1.5 years on average--and highly variable, (2) roughly one-third of projects are abandoned in planning, (3) property price appreciation reduces the likelihood of abandonment. We construct a model with endogenous planning starts and abandonment that matches these facts. Endogenous abandonment makes short-term building supply more elastic, as price shocks immediately affect the exercise of construction options rather than just planning starts. ...
Finance and Economics Discussion Series , Paper 2024-016

Journal Article
The Housing Market and the Pandemic

Econ Focus , Issue 4Q , Pages 30-34

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