The consumption boom-bust cycle in the 2000s coincided with large fluctuations in the volume of home equity borrowing. Contrary to conventional wisdom, I show that homeowners largely borrowed for residential investment and not consumption. I rationalize this empirical finding using a calibrated...

As Korea's household debt has increased rapidly since the mid-2000s, concerns that its economy's hard-wired leveraging may negatively impact economic activity have grown. Calls are being made for policy actions to return the economy to its long-run trend. Housing preferences and monetary shocks...

We develop a micro based macro model for residential home prices in an economy where defaults on residential mortgages negatively affect housing prices. Our model enables us to study the impact of subprime defaults on prime borrowers and the impact of various government policies on the housing...

We develop a dynamic simulation model for residential home prices in an economy where defaults on residential mortgages negatively affect housing prices and aggregate income. This simulation model enables us to study the impact of subprime defaults on prime borrowers and the impact of various...

This Federal Housing Finance Agency (FHFA) research paper examines the history of House Price Index (HPI) revisions over the recent national boom-bust cycle in house prices. The paper is part of FHFA's ongoing effort to enhance public understanding of the nation's housing finance system. The...

The boom and bust in housing during the 2000s has led to renewed interest in the boom and bust in housing between 1920 and 1940. The most commonly used housing value series for this period is reported by Robert Shiller in Irrational Exuberance. We investigate the changes in housing values in...