The Subprime Crisis: Is Government Housing Policy to Blame?

Robert B. Avery () and Kenneth Brevoort
Additional contact information
Robert B. Avery: Board of Governors of the Federal Reserve System

The Review of Economics and Statistics, 2015, vol. 97, issue 2, 352-363

Abstract: Some have suggested that housing policy, embodied by the Community Reinvestment Act (CRA) and affordable housing goals of the government-sponsored enterprises (GSEs), caused the subprime crisis. We examine if these programs led to worse mortgage outcomes using two approaches. The first examines whether more activity by CRA-covered lenders, or more loan sales to the GSEs, was associated with worse outcomes. The second uses regression discontinuity to determine if outcomes were worse at the geographic thresholds used by each program. Our results suggest that neither program played a significant role in the subprime crisis. © 2015 The President and Fellows of Harvard College and the Massachusetts Institute of Technology

Keywords: housing policy; Community Reinvestment Act; CRA; affordable housing; GSE; subprime; regression discontinuity (search for similar items in EconPapers)
JEL-codes: I00 I38 P00 R00 R38 (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations: View citations in EconPapers (24)

Downloads: (external link)
http://www.mitpressjournals.org/doi/pdf/10.1162/REST_a_00491 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: The subprime crisis: Is government housing policy to blame? (2011)
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:tpr:restat:v:97:y:2015:i:2:p:352-363

Ordering information: This journal article can be ordered from
https://mitpressjour ... rnal/?issn=0034-6535

Access Statistics for this article

The Review of Economics and Statistics is currently edited by Pierre Azoulay, Olivier Coibion, Will Dobbie, Raymond Fisman, Benjamin R. Handel, Brian A. Jacob, Kareen Rozen, Xiaoxia Shi, Tavneet Suri and Yi Xu

More articles in The Review of Economics and Statistics from MIT Press
Bibliographic data for series maintained by The MIT Press ().