scholarly journals Mortgage Debt, Consumption, and Illiquid Housing Markets in the Great Recession

2020 ◽  
Vol 110 (6) ◽  
pp. 1603-1634 ◽  
Author(s):  
Carlos Garriga ◽  
Aaron Hedlund
Keyword(s):  
Portfolio Choice ◽  
House Prices ◽  
Equilibrium Analysis ◽  
Tenure Choice ◽  
Cross Sectional ◽  
Mortgage Debt ◽  
Balance Sheets ◽  
The Great Recession ◽  
Model Features

Using a quantitative heterogeneous agents macro-housing model and detailed microdata, this paper studies the drivers of the 2006–2011 housing bust, its spillovers to consumption and the credit market, and the ability of mortgage rate interventions to accelerate the recovery. The model features tenure choice between owning and renting, rich portfolio choice, long-term defaultable mortgages, and endogenously illiquid housing from search frictions. The equilibrium analysis and empirical evidence suggest that the deterioration in house prices and liquidity, transmitted to consumption via balance sheets that vary in composition and depth, is central to explaining the observed aggregate and cross-sectional patterns. (JEL E23, E32, E44, G21, R31)

Rich Pickings? Risk, Return, and Skill in Household Wealth

2020 ◽  
Vol 110 (9) ◽  
pp. 2703-2747 ◽  
Author(s):  
Laurent Bach ◽  
Laurent E. Calvet ◽  
Paolo Sodini
Keyword(s):  
Idiosyncratic Risk ◽  
Household Wealth ◽  
Expected Return ◽  
Cross Sectional ◽  
Balance Sheets ◽  
Net Worth ◽  
Average Return ◽  
Risk Free Rate ◽  
Free Rate

We investigate wealth returns on an administrative panel containing the disaggregated balance sheets of Swedish residents. The expected return on household net wealth is strongly persistent, determined primarily by systematic risk, and increasing in net worth, exceeding the risk-free rate by the size of the equity premium for households in the top 0.01 percent. Idiosyncratic risk is transitory but generates substantial long-term dispersion in returns in top brackets. Systematic and idiosyncratic risk both drive the cross-sectional distribution of the geometric average return over a generation. Furthermore, wealth returns explain most of the historical increase in top wealth shares. (JEL D31, G11, G51)

scholarly journals Firm Leverage, Consumer Demand, and Employment Losses During the Great Recession*

2016 ◽  
Vol 132 (1) ◽  
pp. 271-316 ◽  
Author(s):  
Xavier Giroud ◽  
Holger M. Mueller
Keyword(s):  
Great Recession ◽  
Consumer Demand ◽  
House Prices ◽  
Census Bureau ◽  
Demand Shocks ◽  
Balance Sheets ◽  
The Great Recession ◽  
Level Data ◽  
Target Firms ◽  
Micro Level

Abstract This article argues that firms’ balance sheets were instrumental in the transmission of consumer demand shocks during the Great Recession. Using micro-level data from the U.S. Census Bureau, we find that establishments of more highly levered firms experienced significantly larger employment losses in response to declines in local consumer demand. These results are not driven by firms being less productive, having expanded too much prior to the Great Recession, or being generally more sensitive to fluctuations in either aggregate employment or house prices. Likewise, at the county level, we find that counties with more highly levered firms experienced significantly larger declines in employment in response to local consumer demand shocks. Accordingly, firms’ balance sheets also matter for aggregate employment. Our results suggest a possible role for employment policies that target firms directly besides conventional stimulus.

Theoretical and Methodological Problems of a 10-Year Follow-Up Program Evaluation Study

2002 ◽  
Vol 18 (3) ◽  
pp. 229-241 ◽  
Author(s):  
Kurt A. Heller ◽  
Ralph Reimann
Keyword(s):  
Program Evaluation ◽  
Evaluation Studies ◽  
Evaluation Study ◽  
Control Groups ◽  
Cross Sectional ◽  
Long Term Study ◽  
Partial Inclusion ◽  
Methodological Problems

Summary In this paper, conceptual and methodological problems of school program evaluation are discussed. The data were collected in conjunction with a 10 year cross-sectional/longitudinal investigation with partial inclusion of control groups. The experiences and conclusions resulting from this long-term study are revealing not only from the vantage point of the scientific evaluation of new scholastic models, but are also valuable for program evaluation studies in general, particularly in the field of gifted education.

House Prices, Mortgage Debt, and Labor Mobility

2017 ◽  
Author(s):  
Radhakrishnan Gopalan ◽  
Barton H. Hamilton ◽  
Ankit Kalda ◽  
David Sovich
Keyword(s):  
Labor Mobility ◽  
House Prices ◽  
Mortgage Debt

Portfolio Choice toward Long-Term Mutual Funds in Thailand

2017 ◽  
Author(s):  
Adisorn Promkaewngarm ◽  
Jirarat Pipatnarapong ◽  
Natdanai Aleenajitpong ◽  
Sompong Promsa-ad
Keyword(s):  
Mutual Funds ◽  
Portfolio Choice

Real Estate

2017 ◽  
Author(s):  
Stefan Homburg
Keyword(s):  
Real Estate ◽  
Great Recession ◽  
House Prices ◽  
Borrowing Constraints ◽  
Macroeconomic Models ◽  
Land Prices ◽  
The Great Recession ◽  
Quantitative Importance

Chapter 6 examines real estate as a neglected feature of actual economies. It begins with an empirical overview demonstrating the preeminent role of land as a part of nonfinancial wealth. Whereas many macroeconomic models represent nonfinancial wealth by a symbol K that is interpreted as machines and equipment (if not robots), the text makes clear that such items are of minor quantitative importance. In contemporary economies, nonfinancial wealth consists chiefly of real estate. This is the proper reason so many analysts conjecture a link between house prices and the Great Recession. Changes in house prices (primarily changes in land prices) operate on the economy through their influence on nonfinancial wealth. Nonfinancial wealth affects consumption directly and investment indirectly since it relaxes or tightens borrowing constraints. Building on the results obtained in previous chapters, the text studies housing manias and leverage cycles and relates its main findings to US data.

Disruptive Soft Law and Post-Crisis US Reform

2018 ◽  
Author(s):  
Abraham L. Newman ◽  
Elliot Posner
Keyword(s):  
Financial Markets ◽  
Great Recession ◽  
Regulatory Reform ◽  
The United States ◽  
Soft Law ◽  
Long Term Effects ◽  
The Great Recession ◽  
The Us ◽  
International Interaction

Chapter 6 examines the long-term effects of international soft law on policy in the United States since 2008. The extent and type of post-crisis US cooperation with foreign jurisdictions have varied considerably with far-reaching ramifications for international financial markets. Focusing on the international interaction of reforms in banking and derivatives, the chapter uses the book’s approach to understand US regulation in the wake of the Great Recession. The authors attribute seemingly random variation in the US relationship to foreign regulation and markets to differences in pre-crisis international soft law. Here, the existence (or absence) of robust soft law and standard-creating institutions determines the resources available to policy entrepreneurs as well as their orientation and attitudes toward international cooperation. Soft law plays a central role in the evolution of US regulatory reform and its interface with the rest of the world.

Creativity in Sociocultural Systems

2019 ◽  
pp. 269-284
Author(s):  
Dean Keith Simonton
Keyword(s):  
Macro Level ◽  
Historical Overview ◽  
Creative Activity ◽  
Cross Sectional ◽  
Individual Level ◽  
Short And Long Term ◽  
The Cross ◽  
Sociocultural Systems

Although psychologists typically see creativity as an individual-level event, sociologists and cultural anthropologists are more likely to view it as a sociocultural phenomenon. This phenomenon takes place at the level of relatively large and enduring collectives, such as cultures, nations, and even whole civilizations. This chapter reviews the extensive research on such macro-level creativity. The review begins with a historical overview before turning to the cross-sectional research on the creative Ortgeist, a subject that encompasses the factors that influence the relative creativity of both preliterate cultures and entire modern nations. From there the chapter turns to role of the Zeitgeist in affecting the creativity of civilizations across time—the rise and fall of creative activity. This research examines both quantitative and qualitative causes that operate both short- and long-term.

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