Effects of a Mortgage Interest Rate Subsidy: Evidence from Colombia

Marc Hofstetter, Jorge Tovar and Miguel Urrutia ()

No 8749, Documentos CEDE from Universidad de los Andes, Facultad de Economía, CEDE

Abstract: Government intervention in the construction sector as a way to boost the economy hasbeen a constant in Colombia for the past 90 years. This paper explicitly tests the impact of the most recent of such interventions: a subsidy to the mortgage interest rate. Our results show that the subsidy boosted mortgage loans by around 38 percent. However, we also find that real interest rates went up by 1.09 percent, i.e., there has been an incomplete pass through of the subsidy to the consumer. We estimate the pass-through of such intervention to be in the range of 65 percent to 74 percent.

Keywords: Mortgage loans; mortgage interest rate subsidy; history of mortgage loans in Colombia. (search for similar items in EconPapers)
JEL-codes: N96 R21 R28 (search for similar items in EconPapers)
Pages: 38
Date: 2011-05-09
New Economics Papers: this item is included in nep-lam and nep-ure
References: View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://repositorio.uniandes.edu.co/bitstream/handle/1992/8252/dcede2011-20.pdf

Related works:
Working Paper: Effects of a Mortgage Interest Rate Subsidy: Evidence from Colombia (2011)
Working Paper: Effects of a Mortgage Interest Rate Subsidy: Evidence from Colombia (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:col:000089:008749

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