Modelling a housing and mortgage crisis

Goodhart, Charles, Tsomocos, Dimitri and Vardoulakis, Alexandros (2010) Modelling a housing and mortgage crisis. Financial Markets Group Discussion Papers (649). Financial Markets Group, The London School of Economics and Political Science, London, UK.

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Abstract

The purpose of this paper is to explore financial instability in this case due to a housing crisis and defaults on mortgages. The model incorporates heterogeneous banks and households. Mortgages are secured by collateral, which is equal to the amount of housing which agents purchase. Individual default is spread through the economy via the interbank market. Several comparative statics illustrate the directional effects of a variety of shocks in the economy.

Item Type:	Monograph (Discussion Paper)
Official URL:	https://www.fmg.ac.uk/
Additional Information:	© 2010 The Authors
Divisions:	Financial Markets Group
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HG Finance
JEL classification:	D - Microeconomics > D5 - General Equilibrium and Disequilibrium > D52 - Incomplete Markets E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E40 - General E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E50 - General G - Financial Economics > G1 - General Financial Markets > G10 - General G - Financial Economics > G2 - Financial Institutions and Services > G20 - General
Date Deposited:	19 May 2023 09:57
Last Modified:	14 Sep 2024 04:32
URI:	http://eprints.lse.ac.uk/id/eprint/119090

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