Modelling a Housing and Mortgage Crisis

Alexandros Vardoulakis, Dimitrios Tsomocos and Charles Goodhart ()

FMG Discussion Papers from Financial Markets Group

Abstract: The purpose of this paper is to explore financial instability in this case due to a housing crisis and defaults on mortgages. The model incorporates heterogeneous banks and households. Mortgages are secured by collateral, which is equal to the amount of housing which agents purchase. Individual default is spread through the economy via the interbank market. Several comparative statics illustrate the directional effects of a variety of shocks in the economy.

Date: 2010-02
New Economics Papers: this item is included in nep-ban, nep-cba, nep-pke, nep-rmg and nep-ure
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http://www.lse.ac.uk/fmg/workingPapers/discussionPapers/fmgdps/dp649.pdf (application/pdf)

Related works:
Chapter: Modeling a Housing and Mortgage Crisis (2011)
Working Paper: Modeling a Housing and Mortgage Crisis (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:fmg:fmgdps:dp649

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