Credit Growth and the Financial Crisis: A New Narrative

@article{Albanesi2017CreditGA,
  title={Credit Growth and the Financial Crisis: A New Narrative},
  author={Stefania Albanesi and Giacomo De Giorgi and Jaromir B. Nosal},
  journal={ERN: Behavioral Life Cycle Models (Topic)},
  year={2017}
}
A broadly accepted explanation for the 2007-09 financial crisis emphasizes the growth in lending to subprime households during the preceding boom. According to this view, the resulting rise in insolvencies and foreclosures caused the financial crisis, leading to a decline in housing values and a broad contraction in credit. This paper studies the evolution of household borrowing and delinquency between 1999 and 2013, using a large administrative panel of credit file data. Our findings suggest… 
Credit Growth and the Financial Crisis: A New Narrative
This paper studies the evolution of mortgage debt and defaults between 2001 and 2013 using a large, nationally representative panel of credit reports. Our analysis suggests that the 2007-2009 spike
Credit Supply Driven Boom-Bust Cycles
Can shifts in the credit supply generate a boom-bust cycle similar to the one observed in the US around 2008? To answer this question, we develop a general equilibrium model that combines a rich
Government Guarantees and the Debt Capacity of Housing
  • Economics, History
  • 2019
This paper shows that the distribution of combined loan-to-value ratios (CLTVs) for home purchase mortgages has been remarkably stable over the last two decades. While the private provision of
Dynamics of Housing Debt in the Recent Boom and Great Recession
This paper documents a number of key facts about the evolution of mortgage debt, homeownership, debt burden, and subsequent delinquency during the recent housing boom and Great Recession. We show
Early Warning Indicators for Systemic Banking Crises: Household Debt and Property Prices
The 2008 financial crisis was the result of escalating house prices and a hasty increase in household debt. In a sample of 41 advanced and emerging countries, this paper employs a logit estimation
Crises in the Housing Market: Causes, Consequences, and Policy Lessons
The global financial crisis of 2007–2009 helped usher in a stronger consensus about the central role that housing plays in shaping economic activity, particularly during large boom and bust episodes.
Cross-Sectional Patterns of Mortgage Debt During the Housing Boom: Evidence and Implications
The reallocation of mortgage debt to low-income or marginally qualified borrowers plays a central role in many explanations of the early 2000s housing boom. We show that such a reallocation never
Cross-Sectional Patterns of Mortgage Debt during the Housing Boom: Evidence and Implications
The reallocation of mortgage debt to low-income or marginally qualified borrowers plays a central role in many explanations of the early 2000s housing boom. We show that such a reallocation never
Regressive Mortgage Credit Redistribution in the Post-crisis Era
We analyze the effects of a recent piece of consumer protection regulation -- Dodd-Frank -- on mortgage originations. Dodd-Frank aimed at reducing mortgage fees and abuses against vulnerable
The Rise and Fall of Consumption in the 2000s: A Tangled Tale
U.S. consumption has gone through steep ups and downs since 2000. We quantify the statistical impact of income, unemployment, house prices, credit scores, debt, financial assets, expectations,
...
1
2
3
4
5
...

References

SHOWING 1-10 OF 53 REFERENCES
The Financial Crisis at the Kitchen Table: Trends in Household Debt and Credit
The Federal Reserve Bank of New York (FRBNY) Consumer Credit Panel, created from a sample of U.S. consumer credit reports, is an ongoing panel of quarterly data on individual and household debt. The
Household Debt and Defaults from 2000 to 2010: The Credit Supply View
During the first decade of the 21st century, the United States witnessed a dramatic rise in household debt followed by a severe default crisis. In this study, we review the existing literature and
Loan Originations and Defaults in the Mortgage Crisis: The Role of the Middle Class
This paper highlights the importance of middle-class and high-FICO borrowers for the mortgage crisis. Contrary to popular belief, which focuses on subprime and poor borrowers, we show that mortgage
Cross-Sectional Patterns of Mortgage Debt During the Housing Boom: Evidence and Implications
The reallocation of mortgage debt to low-income or marginally qualified borrowers plays a central role in many explanations of the early 2000s housing boom. We show that such a reallocation never
The Great Recession: Lessons from Microeconomic Data
Crises and sharp economic downturns, while undesirable, provide economists with a unique opportunity to test and hone economic theory. Indeed, some of the most influential advance ments in economic
Credit Crises, Precautionary Savings, and the Liquidity Trap
We use a model a la Bewly-Huggett-Ayagari to explore the effects of a credit crunch on consumer spending. Households borrow and lend to smooth idiosyncratic income shocks facing an exogenous
A Simple Model of Subprime Borrowers and Credit Growth
The surge in credit and house prices that preceded the Great Recession was particularly pronounced in ZIP codes with a higher fraction of subprime borrowers (Mian and Sufi, 2009). We present a simple
Household Balance Sheets, Consumption, and the Economic Slump*
We investigate the consumption consequences of the 2006--9 housing collapse using the highly unequal geographic distribution of wealth losses across the United States. We estimate a large elasticity
A New Look at the U.S. Foreclosure Crisis: Panel Data Evidence of Prime and Subprime Borrowers from 1997 to 2012
Utilizing new panel micro data on the ownership sequences of all types of borrowers from 1997-2012 leads to a reinterpretation of the U.S. foreclosure crisis as more of a prime, rather than a
...
1
2
3
4
5
...