Multiple Credit Constraints and Time-Varying Macroeconomic Dynamics

I explore the macroeconomic implications of borrowers facing both loan-to-value (LTV) and debt-service-to-income (DTI) limits, using an estimated DSGE model. identify when each constraint dominated over period 1984-2019: LTV constraints dominate in contractions, house prices are relatively low – DTI expansions, interest rates high. also find that standards were relaxed during mid-2000s’ boom, lower limits or higher rates, but not would have prevented boom. Finally, county panel data attest to multiple credit as a source nonlinear dynamics.