EconPapers    
Economics at your fingertips  
 

Regional Redistribution through the US Mortgage Market

Erik Hurst (), Benjamin Keys, Amit Seru and Joseph Vavra ()

American Economic Review, 2016, vol. 106, issue 10, 2982-3028

Abstract: Regional shocks are an important feature of the US economy. Households' ability to self-insure against these shocks depends on how they affect local interest rates. In the United States, most borrowing occurs through the mortgage market and is influenced by the presence of government-sponsored enterprises (GSE). We establish that despite large regional variation in predictable default risk, GSE mortgage rates for otherwise identical loans do not vary spatially. In contrast, the private market does set interest rates which vary with local risk. We use a spatial model of collateralized borrowing to show that the national interest rate policy substantially affects welfare by redistributing resources across regions.

JEL-codes: E32 E43 G21 G28 L32 R11 R31 (search for similar items in EconPapers)
Date: 2016
Note: DOI: 10.1257/aer.20151052
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (5) Track citations by RSS feed

Downloads: (external link)
https://www.aeaweb.org/articles?id=10.1257/aer.20151052 (application/pdf)
https://www.aeaweb.org/content/file?id=2368 (application/zip)
https://www.aeaweb.org/articles/attachments?retrie ... IG1iVsVbsEVYD_t4UUH7 (application/pdf)
https://www.aeaweb.org/articles/attachments?retrie ... i8wHoau864K20MIYPFFD (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: Regional Redistribution through the U.S. Mortgage Market (2015) Downloads
Working Paper: Regional Redistribution Through the U.S. Mortgage Market (2015) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aecrev:v:106:y:2016:i:10:p:2982-3028

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/subscribe.html

Access Statistics for this article

American Economic Review is currently edited by Pinelopi Koujianou Goldberg

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Series data maintained by Jane Voros ().

 
Page updated 2017-09-29
Handle: RePEc:aea:aecrev:v:106:y:2016:i:10:p:2982-3028