Suchergebnisse

This paper identifies the impact of borrowing constraints on homeownership in the U.S. in the aftermath of the 2008 financial crisis. While homeownership declines and tightened credit are evident, the role the tightening of credit has had on the probability of individual households to become homeowners has not been previously identified. The homeownership rate in 2010-2013 is estimated to be 2.3 percentage points lower than if the constraints were set at the 2001 level.

When the transmission channel between savers and borrowing firms is disturbed, firms may find themselves borrowing-constrained. I study the optimal fiscal policy response to a tightening borrowing constraint in a simple two-period model. I find that it is not optimal to subsidize firms, although this would relax the constraint and help firms directly. Instead, the optimal response exploits the distortion caused by the borrowing constraint and reduces existing tax distortions. This result is robust to when endogenous government spending and investment are part of the government's set of instruments.

Kitaura (2012) shows an inverse U-shape relationship between balanced growth and the tightness of educational borrowing constraints and argues that a loosening of constraints need not be Pareto-improving even if growth increases. We provide a careful analysis of the transition, showing that an unanticipated loosening of credit constraints is welfare-improving for initial generations, but may be detrimental to (some) subsequent generations when growth increases. Thus, we argue that governments concerned with re-election may support a loosening of credit at the expense of future generations.

In this paper we model an OLG economy à la Kiyotaki and Moore whose novel feature is the role of money as a store of value and of bequest as a source of funds to be "invested" in landholding. The dynamics generated by the model are generally characterized by irregular cyclical trajectories and, under special con.guration of the parameters, a strange attractor appears. In this setting, an expansionary monetary policy may have a stabilizing role due to the interaction between money holding and the accumulation of borrowers' net worth.

This paper proposes an explanation for why universal suffrage has not implied larger rich-to-poor transfers of wealth. The main argument is that, in the presence of borrowing constraints, if current taxation finances (at least partially) policies that redistribute future income, the poor, who are more likely to be liquidity constrained, may form a coalition with the rich and vote for low redistribution. In this context, the effects of an increase in income inequality is concentrated among the poor or the middle class. In the former case, an increase in inequality tends to decrease redistribution, whereas, in the latter case, it tends to increase redistribution.

"The current level and form of subsidization of college education is often rationalized by appeal to capital constraints on individuals. Because borrowing against human capital is difficult, capital constraints can lead to nonoptimal outcomes unless government intervenes. We develop a simple dynamic general equilibrium model of the economy that permits us to explore the impact of alternative ways of subsidizing higher education. The key features of this model include endogenously determined bequests from parents that can be used to finance schooling, uncertainty in college completion related to differences in ability, and wage determination based upon the amount of schooling in the economy. Because policies toward college lead to large changes in schooling, it is very important to consider the general equilibrium effects on wages. Within this structure, we analyze tuition subsidies such as exist in most public colleges, alternative forms of need-based aid, income contingent loans, and merit-based aid. Each of these policies tends both to improve the efficiency of the economy while yielding more intergenerational mobility and greater income equality. But, the various policies have quite different implications for societal welfare, and the underlying subsidy patterns vary widely"--National Bureau of Economic Research web site