The Effects of the saving and banking glut on the U.S. economy

Alejandro Justiniano, Giorgio Primiceri and Andrea Tambalotti

No 648, Staff Reports from Federal Reserve Bank of New York

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: U.S. trade deficit; household debt (search for similar items in EconPapers)
JEL-codes: E27 F32 F41 F47 (search for similar items in EconPapers)
Date: 2013-10-01
New Economics Papers: this item is included in nep-dge and nep-mac
Note: For a published version of this report, see Alejandro Justiniano, Giorgio E. Primiceri, and Andrea Tambalotti, "The Effects of the Saving and Banking Glut on the U.S. Economy," Journal of International Economics 92, s1 (April 2014): s52-67.
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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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