Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/101011
Authors: 
Jeske, Karsten
Krueger, Dirk
Editors: 
Jeske, Karsten
Krueger, Dirk
Year of Publication: 
2005
Series/Report no.: 
Working Paper, Federal Reserve Bank of Atlanta 2005-15
Abstract: 
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.
Subjects: 
housing
mortgage market
default risk
JEL: 
E21
G11
R21
Document Type: 
Working Paper

Files in This Item:
File
Size
485.34 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.