This paper comments on the procyclicality of mortgage lending. By applying a framework for credit constraints along the lines of Kiyotaki and Moore (1997), the credit risk assessments underlying mortgage lending is shown to contain a potential regime shift. Depending on the relationship between...

Housing market analysis is normally rooted in one of two distinct modeling frameworks. Either in one where house prices are residually determined by changes in macroeconomic variables such as interest rates, wages, inflation, unemployment and the cost of construction. This approach ignores...

This paper derives the optimal LTV-ratio for a mortgagee that takes on deposits while it is supplying mortgages using housing as collateral. As the LTV-ratio represents the risk exposure of a mortgagee the optimal LTV-ratio varies according to moral hazard, funding, risk pricing, capital...

The purpose of this paper is to demonstrate the interrelation between industrial structure, productivity growth imbalances and cross-sectoral subsidies when it comes to determining economic growth and shaping a country’s transition trajectory. The theoretical framework is a two-sector supply...