Debt relief and slow recovery: A decade after Lehman

Tomasz Piskorski and Amit Seru

Journal of Financial Economics, 2021, vol. 141, issue 3, 1036-1059

Abstract: We follow a representative panel of millions of consumers in the United States from 2007 to 2017 and document new facts on the long-term effects of the Great Recession. There were about six million foreclosures over this period. Only a quarter of foreclosed households regained homeownership, taking an average four years to do so. This persistent loss of homeownership accounts for most of the decline in the U.S. homeownership rate. Despite massive stimulus and debt relief policies, house prices, consumption, and unemployment remained below precrisis levels in about half of the zip codes in the United States Regions that recovered to precrisis levels took on average four to five years. Regional variation in the extent and speed of recovery is strongly and persistently associated with frictions affecting the pass-through of lower interest rates and debt relief to households.

Keywords: Great Recession; Slow recovery; Debt relief; Refinancing; Consumption; House prices; Default; Foreclosures; Unemployment; Mortgages; Government intervention; Monetary policy pass-through (search for similar items in EconPapers)
JEL-codes: E2 E44 E5 E6 G18 G21 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0304405X20303482
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Debt Relief and Slow Recovery: A Decade after Lehman (2018)
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:eee:jfinec:v:141:y:2021:i:3:p:1036-1059

DOI: 10.1016/j.jfineco.2020.12.008

Access Statistics for this article

Journal of Financial Economics is currently edited by G. William Schwert

More articles in Journal of Financial Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().