Rubio, Margarita - Banco de España - 2009
The aim of this paper is twofold. First, I study how the proportion of fixed and variable-rate mortgages in an economy … proportion of constrained households borrows at a variable rate, while the rest borrows at a fixed rate. The model predicts that … in an economy with mostly variable-rate mortgages, an exogenous interest rate shock has larger effects on borrowers than …