The o¢ cial report of the U.S. Financial Crisis Inquiry Commission (2011) states: ìWe con- clude this Önancial crisis was avoidable. . . Despite the expressed view of many on Wall Street and in Washington that the crisis could not have been foreseen or avoided, there were warning signs. The tragedy was that they were ignored or discountedî (p. xvii). The report lists such red áags as ìan explosion in risky subprime lending and securitization, an unsustainable rise in housing prices, widespread reports of egregious and predatory lending practices, (and) dramatic increases in household mortgage debt.î
Our preferred model of the boom-bust cycle includes the following elements: (1) households who employ simple moving-average forecast rules that give rise to excess volatility in asset prices, (2) long-term mortgage contracts that cause the stock of outstanding household debt to adjust more slowly than the áow of new loans, and (3) relaxed lending standards during the run-up that created the conditions for a credit-fueled housing bubble. Our results further suggest that policy actions by regulators to control the áow of mortgage credit by enforcing prudent lending standards can limit a housing boom on the upside, such that the subsequent bust and the resulting economic fallout may be less severe.
The o¢ cial report of the U.S. Financial Crisis Inquiry Commission (2011) states: ìWe con- clude this Önancial crisis was avoidable. . . Despite the expressed view of many on Wall Street and in Washington that the crisis could not have been foreseen or avoided, there were warning signs. The tragedy was that they were ignored or discountedî (p. xvii). The report lists such red áags as ìan explosion in risky subprime lending and securitization, an unsustainable rise in housing prices, widespread reports of egregious and predatory lending practices, (and) dramatic increases in household mortgage debt.îOur preferred model of the boom-bust cycle includes the following elements: (1) households who employ simple moving-average forecast rules that give rise to excess volatility in asset prices, (2) long-term mortgage contracts that cause the stock of outstanding household debt to adjust more slowly than the áow of new loans, and (3) relaxed lending standards during the run-up that created the conditions for a credit-fueled housing bubble. Our results further suggest that policy actions by regulators to control the áow of mortgage credit by enforcing prudent lending standards can limit a housing boom on the upside, such that the subsequent bust and the resulting economic fallout may be less severe.
การแปล กรุณารอสักครู่..