Mortgage Prepayment and Path-Dependent Effects of Monetary Policy
| dc.contributor.author | Berger, David | |
| dc.contributor.author | Milbradt, Konstantin | |
| dc.contributor.author | Tourre, Fabrice | |
| dc.contributor.author | Vavra, Joseph | |
| dc.date.accessioned | 2019-07-30T18:58:04Z | |
| dc.date.available | 2019-07-30T18:58:04Z | |
| dc.date.issued | 2019-4 | |
| dc.description.abstract | How much ability does the Fed have to stimulate the economy by cutting interest rates? We argue that the presence of substantial debt in fixed-rate, prepayable mortgages means that the ability to stimulate the economy by cutting interest rates depends not just on their current level but also on their previous path. Using a household model of mortgage prepayment matched to detailed loan-level evidence on the relationship between prepayment and rate incentives, we argue that recent interest rate paths will generate substantial headwinds for future monetary stimulus. | |
| dc.identifier.citation | This is a pre-print and has not been peer reviewed. | |
| dc.identifier.uri | https://hdl.handle.net/10657/4340 | |
| dc.language.iso | en_US | |
| dc.subject | Monetary policy | |
| dc.subject | Path-Dependence | |
| dc.subject | Refinancing | |
| dc.subject | Mortgage Debt | |
| dc.title | Mortgage Prepayment and Path-Dependent Effects of Monetary Policy | |
| dc.type | Seminar |