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Re-examining the role of financial constraints in business cycles: Is something wrong with the credit multiplier?

Olivella, Virginia; Roldán-Peña, Jessica - 2013

Motivated by the apparent failure of the credit multiplier mechanism (CM) to deliver amplification in DSGE models, we re-examine its role in business cycles to address the question: is something wrong with the CM? Our answer is no. In coming to this answer we construct a model with reproducible...

Persistent link: https://www.econbiz.de/10010322546

An approach for housing wealth estimation: The Mexican case

García, Ana Laura; González, Juan Pedro; Velázquez, … - 2022

Housing is the greatest asset held by most households, and it is an important determinant of their financing and … consumption decisions. Despite the fact that measuring housing wealth is crucial for understanding households' economic behavior … data requirements while still meeting international guidelines. Our results suggest housing wealth in Mexico has followed …

Persistent link: https://www.econbiz.de/10014319977

Mortgage default in an estimated model of the U.S. housing market

Lambertini, Luisa; Victoria, Nuguer; Uysal, Pinar - 2017

This paper models the housing sector, mortgages and endogenous default in a DSGE setting with nominal and real … housing demand shock. Next we use our estimated model to evaluate a policy that reduces the principal of underwater mortgages …

Persistent link: https://www.econbiz.de/10011788953

Monetary rules, financial stability and welfare in a non-Ricardian framework

Adame Espinosa, Francisco - 2023

This work is based on a new Keynesian theoretical model for an advanced economy, which incorporates overlapping generations to analyze a channel through which fluctuations in household financial wealth influence aggregate demand. The optimal monetary policy, corresponding to that of a central...

Persistent link: https://www.econbiz.de/10014541062

Labor Busted, Rising Inequality and the Financial Crisis of 1929: An Unlearned Lesson

Wisman, Jon D. - 2013

Although the Great Depression and the financial crisis of 1929 that triggered it have been endlessly studied, there is little consensus and even much puzzlement as to why they occurred. This article claims that beneath the many causal factors that have been advanced lie deeper underlying...

Persistent link: https://www.econbiz.de/10011163300

Wage Stagnation, Rising Inequality and the Financial Crisis of 2008

Wisman, Jon D. - 2012

The most widely embraced explanations of the financial crisis of 2008 have centered upon inadequate regulation stemming from laissez-faire ideology, combined with low interest rates. Although these widely-acknowledged causal factors are true, beneath them lie deeper determining forces that have...

Persistent link: https://www.econbiz.de/10010925724

House prices and the distribution of wealth around the great recession

Cóndor, Richard; Moguel, Rodolfo Oviedo - 2023

shifts in the distribution of wealth during the years around the Great Recession. We replicate the dynamics of the housing … market using shocks to aggregate income, the distribution of income, credit conditions, and expectations of future housing … mortgage debt, default rates, and housing holdings by households at the bottom of the wealth distribution. The boom in house …

Persistent link: https://www.econbiz.de/10014540953

Sovereign default risk and uncertainty premia

Pouzo, Demian; Presno, Ignacio - 2012

This paper studies how foreign investors' concerns about model misspecification affect sovereign bond spreads. We develop a general equilibrium model of sovereign debt with endogenous default wherein investors fear that the probability model of the underlying state of the borrowing economy is...

Persistent link: https://www.econbiz.de/10010343347

Consumption heterogeneity by occupation: Understanding the impact of occupation on personal consumption during the COVID-19 pandemic

Cotton, Christopher D.; Garga, Vaishali; Rohan, Justin - 2020

This paper exploits the variation in the unemployment rate of different occupations in the first part of the COVID-19 pandemic to analyze the response of consumption spending to unemployment risk. We find that earlier in the pandemic, higher unemployment risk did not reduce relative spending....

Persistent link: https://www.econbiz.de/10012606355

Consumption, sentiment, and economic news

Starr, Martha - 2008

This paper investigates the influence of economic news on consumer sentiment, and examines whether ‘news shocks’ –- changes in coverage that would not be expected from incoming data on economic fundamentals -– have aggregate effects. Using monthly U.S. data and a structural...

Persistent link: https://www.econbiz.de/10005673434