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The U.S. mortgage before the 1930s would be nearly unrecognizable today: it featured variable interest rates, high down payments and short maturities. The authors compare the form of U.S. home mortgages today with those in other countries. The U.S. mortgage provides many more options to borrowers than are commonly provided elsewhere: American homebuyers can choose whether to pay a fixed or floating rate of interest; they can lock in their interest rate in between the time they apply for the mortgage and the time they purchase their house; they can choose the time at which the mortgage rate resets; they can choose the term and the amortization period; they can prepay freely; and they can generally borrow against home equity freely. They can also obtain home mortgages at attractive terms with very low down payments. The authors discuss the nature of the U.S. government intervention in home mortgage markets that has led to the specific choices available to American homebuyers. They believe that the unique characteristics of the U.S. mortgage provide substantial benefits for American homeowners and the overall stability of the economy.

This article tests whether the activity at a metropolitan area's airport helps predict population and employment growth. In regression equations explaining employment and population growth, the article uses various measures of airport activity, including boardings, originations, hub status and cargo volume. Because airports may be a function of, as well as a cause of, growth, the article instruments for airports by using geographical and lagged variables. It finds that, under a variety of specifications, passenger activity is a powerful predictor of growth; cargo activity is not.

This paper examines the effect of different kinds of investments on the business cycle. Specifically, it examines whether residential and non-residential investment Granger cause GDP, and whether GDP Granger causes each of these types of investments. The paper uses quarterly National Income and Products Data for the period 1959 to 1992. Under a wide variety of time-series specifications, residential investment causes, but is not caused by GDP, while non-residential investment does not cause, but is caused by GDP. Thus, housing leads and other types of investment lag the business cycle. The results also suggest that policies designed to funnel capital away from housing into plant and equipment could produce severe short-run dislocations. Copyright American Real Estate and Urban Economics Association.

Housing prices vary widely from market to market in the United States. The purpose of this study is to (1) construct new place-to-place indexes of the price of housing, using the 1990 Census, and (2) analyze the determinants of housing prices, with a particular focus on the supply side determinants-regulatory and natural constraint-as well as the usual demand determinants. Copyright American Real Estate and Urban Economics Association.

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