Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/246113 
Year of Publication: 
2020
Series/Report no.: 
Working Paper No. 10/2020
Publisher: 
Norges Bank, Oslo
Abstract: 
I explore the macroeconomic implications of borrowers facing both loan-to-value (LTV) and debt-service-to-income (DTI) limits, using an estimated DSGE model. I identify when each constraint dominated over the period 1984-2019: LTV constraints dominate in contractions, when house prices are relatively low - and DTI constraints dominate in expansions, when interest rates are relatively high. I also find that DTI standards were relaxed during the mid-2000s' boom, and that lower DTI limits or higher interest rates, but not lower LTV limits, would have prevented the boom. Finally, county panel data attest to multiple credit constraints as a source of nonlinear dynamics.
Subjects: 
Multiple credit constraints
Nonlinear estimation of DSGE models
State-dependent credit origination
JEL: 
C33
D58
E32
E44
Persistent Identifier of the first edition: 
ISBN: 
978-82-8379-163-1
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper
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