The Effects of the Saving and Banking Glut on the U.S. Economy

Andrea Tambalotti, Giorgio Primiceri and Alejandro Justiniano

No 9729, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Abstract. We use a quantitative equilibrium model with houses, collateralized debt and foreign borrowing to study the impact of global imbalances on the U.S. economy in the 2000s. Our results suggest that the dynamics of foreign capital flows account for between one fourth and one third of the increase in U.S. house prices and household debt that preceded the financial crisis. The key to these findings is that the model generates the sustained low level of interest rates observed over that period.

Keywords: Capital flows; Collateral constraints; Global imbalances; House prices; Household debt (search for similar items in EconPapers)
JEL-codes: E21 F32 G21 (search for similar items in EconPapers)
Date: 2013-11
New Economics Papers: this item is included in nep-dge, nep-mac, nep-opm and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Chapter: The Effects of the Saving and Banking Glut on the U.S. Economy (2013)
Working Paper: The Effects of the Saving and Banking Glut on the U.S. Economy (2013)
Working Paper: The Effects of the saving and banking glut on the U.S. economy (2013)
Working Paper: The Effects of the Saving and Banking Glut on the U.S. Economy (2013)
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