Liquidity vs. Wealth in Household Debt Obligations: Evidence from Housing Policy in the Great Recession

Abstract

NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

Macroeconomic Effects of Debt Relief: Consumer Bankruptcy Protections in the Great Recession

“…Agarwal et al (2017) show that HAMP decreased the number of foreclosures and increased durable spending, but that the program only reached one-third of targeted households due to its uneven implementation across lenders. Building on this work, Ganong and Noel (2018) show that the principal write-downs made through HAMP had no impact on underwater borrowers, while the program's maturity extensions had a large positive impact. Finally, Piskorski and Seru (2018) find that regional variation in the extent and speed of the post-crisis recovery is strongly related to frictions affecting the pass-through of lower interest rates and debt relief to households.…”

Monthly Payment Targeting and the Demand for Maturity

“…This provides a new mechanism supporting a rich recent literature establishing payment size per se to be a primary consideration in residential mortgage decisions. See, for example, Fuster and Willen (2017), Eberly and Krishnamurthy (2014), Di Maggio et al (2017), Greenwald (2018), and Ganong and Noel (2018).…”

“…For example,Agarwal et al (2017) estimate borrowing elasticities with respect to credit limits and also use a regressiondiscontinuity design based on FICO scores. In mortgage markets,Adelino et al (2014),Best and Kleven (2017),DeFusco and Paciorek (2017),Di Maggio et al (2017), andGanong and Noel (2018) each use the nonlinear treatment of credit attributes to identify aspects of consumer debt optimization.…”

How Does Household Spending Respond to an Epidemic? Consumption During the 2020 COVID-19 Pandemic

“…Several papers also study the effect of government policies aimed at mitigating the effects of the financial crisis. (Bhutta and Keys, 2016;Di Maggio, Kermani, Keys, Piskorski, Ramcharan, Seru and Yao, 2017;Ganong and Noel, 2018). This paper provides a first look at the impacts of the new epidemic on households, which will be key in evaluating any future policy response.…”