Housing and debt over the life cycle and over the business cycle

Matteo Iacoviello and Marina Pavan

No 09-12, Working Papers from Federal Reserve Bank of Boston

Abstract: This paper describes an equilibrium life-cycle model of housing where nonconvex adjustment costs lead households to adjust their housing choice infrequently and by large amounts when they do so. In the cross-sectional dimension, the model matches the wealth distribution; the age profiles of consumption, homeownership, and mortgage debt; and data on the frequency of housing adjustment. In the time-series dimension, the model accounts for the procyclicality and volatility of housing investment, and for the procyclical behavior of household debt.

Keywords: Housing; Mortgage loans (search for similar items in EconPapers)
Date: 2009
New Economics Papers: this item is included in nep-dge, nep-mac and nep-ure
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Citations: View citations in EconPapers (6)

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Related works:
Journal Article: Housing and debt over the life cycle and over the business cycle (2013)
Working Paper: Housing and Debt Over the Life Cycle and Over the Business Cycle (2011)
Working Paper: Housing and debt over the life cycle and over the business cycle (2011)
Working Paper: Housing and debt over the Life Cycle and over the Business Cycle (2011)
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