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Review of Financial Studies
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License: pd
Data sources: UnpayWall
SSRN Electronic Journal
Article . 2013 . Peer-reviewed
Data sources: Crossref
Review of Financial Studies
Article . 2017 . Peer-reviewed
Data sources: Crossref
EconStor
Research . 2015
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Mortgages and Monetary Policy

Authors: Carlos Garriga; Finn E. Kydland; Roman Šustek;

Mortgages and Monetary Policy

Abstract

Mortgages are long-term nominal loans. Under incomplete asset markets, monetary policy is shown to affect housing investment and the economy through the cost of new mortgage borrowing and the value of payments on outstanding debt. These channels, distinct from traditional transmission of monetary policy, are evaluated within a general equilibrium model. Persistent monetary policy shocks, resembling the level factor in the nominal yield curve, have larger effects than transitory shocks, manifesting themselves as long-short spread. The transmission is stronger under adjustable- than fixed-rate mortgages. Higher, persistent, inflation benefits homeowners under FRMs, but hurts them under ARMs.

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Keywords

Debt servicing costs, mortgages; debt servicing costs; monetary policy; transmission mechanism; housing investment, ddc:330, Residential investment, R21, Mortgages, Debt servicing costs, Monetary policy, Residential investment, Mortgages, Debt Servicing Costs, Monetary Policy, Transmission Mechanism, Housing Investment, Mortgages, Monetary policy, Mortgages; debt servicing costs; monetary policy; transmission mechanism; housing investment., G21, E52, E32, jel: jel:E32, jel: jel:E52, jel: jel:G21, jel: jel:R21

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    popularity
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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
114
Top 1%
Top 10%
Top 10%
hybrid