منابع مشابه
Household leverage, housing markets, and macroeconomic fluctuations
This paper examines implications of housing and household leverage on macroeconomic fluctuations under credit shocks in the presence of the zero lower bound (ZLB) on nominal interest rates. To this end, I build a housing model by incorporating houses into a standard deleveraging model and allow debt limits to be endogenous. I find that, under an adverse credit shock, only with high leverage can...
متن کاملHouse Prices , Home Equity - Based Borrowing , and the U . S . Household Leverage Crisis
Using individual-level data on homeowner debt and defaults from 1997 to 2008, we show that borrowing against the increase in home equity by existing homeowners is responsible for a significant fraction of both the sharp rise in U.S. household leverage from 2002 to 2006 and the increase in defaults from 2006 to 2008. Employing land topology-based housing supply elasticity as an instrument for ho...
متن کاملCaught between Scylla and Charybdis? Regulating Bank Leverage When There Is Rent-seeking and Risk-shifting
We consider a model in which banking is characterized by asset substitution moral hazard and managerial under-provision of effort in loan monitoring. The privately-optimal bank leverage efficiently balances the benefit of debt in providing the discipline to ensure that the bank monitors its loans against the benefit of equity in attenuating asset-substitution moral hazard. However, when correla...
متن کاملCaught between Scylla and Charybdis? Regulating Bank Leverage When There Is Rent-seeking and Risk-shifting
We consider a model in which banks face two moral hazard problems: 1) asset substitution by shareholders, which can occur when banks make socially-inefficient, risky loans; and 2) managerial under-provision of effort in loan monitoring. The privately-optimal level of bank leverage is neither too low nor too high: It efficiently balances the market discipline that owners of risky debt impose on ...
متن کاملSticky Leverage
This paper considers the macroeconomic effects of allowing for nominal debt contracts in the context of a quantitative business cycle model with financial market frictions. In our setting, as in reality, corporations fund themselves by choosing the appropriate mix of nominal defaultable debt and equity securities to issue in every period. Corporate debt is priced fairly taking into account defa...
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ژورنال
عنوان ژورنال: The Review of Economic Studies
سال: 2019
ISSN: 0034-6527,1467-937X
DOI: 10.1093/restud/rdz040