Credit Supply and the Housing Boom

Alejandro Justiniano, Giorgio Primiceri and Andrea Tambalotti

No 20150420, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: There is no consensus among economists as to what drove the rise of U.S. house prices and household debt in the period leading up to the recent financial crisis. In this post, we argue that the fundamental factor behind that boom was an increase in the supply of mortgage credit, which was brought about by securitization and shadow banking, along with a surge in capital inflows from abroad. This argument is based on the interpretation of four macroeconomic developments between 2000 and 2006 provided by a general equilibrium model of housing and credit.

Keywords: Interest rates; Macroprudential policy; Mortgages; Leverage restrictions; Household debt (search for similar items in EconPapers)
JEL-codes: E2 (search for similar items in EconPapers)
Date: 2015-04-20
New Economics Papers: this item is included in nep-mac and nep-ure
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Credit Supply and the Housing Boom (2019)
Working Paper: Credit Supply and the Housing Boom (2015)
Working Paper: Credit supply and the housing boom (2015)
Working Paper: Credit Supply and the Housing Boom (2015)
Working Paper: Credit Supply and the Housing Boom (2014)
Working Paper: Credit Supply and the Housing Boom (2014)
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