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

Alejandro Justiniano, Giorgio Primiceri and Andrea Tambalotti

No WP-2013-17, Working Paper Series from Federal Reserve Bank of Chicago

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: financial crisis; housing prices; household debt (search for similar items in EconPapers)
JEL-codes: E20 E24 E44 F32 G21 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2013-11-29
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.chicagofed.org/digital_assets/publicati ... s/2013/wp2013_17.pdf Full text (application/pdf)

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)
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:fip:fedhwp:wp-2013-17

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Working Paper Series from Federal Reserve Bank of Chicago Contact information at EDIRC.
Bibliographic data for series maintained by Lauren Wiese ().