Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/93133
Authors: 
Erlingsson, Einar Jon
Teglio, Andrea
Cincotti, Silvano
Stefansson, Hlynur
Sturlusson, Jon Thor
Raberto, Marco
Year of Publication: 
2014
Citation: 
[Journal:] Economics: The Open-Access, Open-Assessment E-Journal [Volume:] 8 [Issue:] 2014-8 [Pages:] 1-42
Abstract: 
This paper investigates the housing and mortgage markets by means of an agent-based macroeconomic model of a credit network economy. A set of computational experiments have been carried out in order to explore the effects of different households' creditworthiness conditions required by banks in order to grant a mortgage. Results show that easier access to credit inflates housing prices, triggering a short run output expansion. However, the artificial economy becomes more unstable and prone to recessions. With stricter conditions the economy is more stable and does not fall into serious recessions, although a too severe regulation can slow down economic growth.
Subjects: 
Credit cycles
housing market
agent-based model
subprime lending
JEL: 
G21
E20
E25
R31
R38
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by/3.0/
Document Type: 
Article

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