Housing and the macroeconomy: The role of implicit guarantees for government-sponsored enterprises

Arbeitspapier

This paper studies the macroeconomic effects of implicit government guarantees of the obligations of government-sponsored enterprises. We construct a model with competitive housing and mortgage markets in which the government provides banks with insurance against aggregate shocks to mortgage default risk. We use this model to evaluate aggregate and distributional impacts of this government subsidy of owner-occupied housing. Preliminary findings indicate that the subsidy leads to higher equilibrium housing investment, higher mortgage default rates, and lower welfare. The welfare effects of this policy vary substantially across members of the population with different economic characteristics.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 2005-15

Classification and Topics

• Classification: Wirtschaft ; Macroeconomics: Consumption; Saving; Wealth ; Portfolio Choice; Investment Decisions ; Urban, Rural, Regional, Real Estate, and Transportation Economics: Housing Demand
• Subject: housing ; mortgage market ; default risk ; Hypothek ; Hypothekenbank ; Öffentliche Bank ; Kreditrisiko ; USA ; Makroökonomischer Einfluss

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Jeske, Karsten ; Krueger, Dirk ; Jeske, Karsten ; Krueger, Dirk
• Event: Veröffentlichung
• (who): Federal Reserve Bank of Atlanta
• (where): Atlanta, GA
• (when): 2005

Further information

• Handle: http://hdl.handle.net/10419/101011
• Last update: 10.03.2025, 11:42 AM CET