Modelling a housing and mortgage crisis
Goodhart, C., Tsomocos, D. & Vardoulakis, A.
(2010).
Modelling a housing and mortgage crisis.
(Financial Markets Group Discussion Papers 649).
Financial Markets Group, The London School of Economics and Political Science.
The purpose of this paper is to explore financial instability in this case due to a housing crisis and defaults on mortgages. The model incorporates heterogeneous banks and households. Mortgages are secured by collateral, which is equal to the amount of housing which agents purchase. Individual default is spread through the economy via the interbank market. Several comparative statics illustrate the directional effects of a variety of shocks in the economy.
| Item Type | Working paper |
|---|---|
| Copyright holders | © 2010 The Authors |
| Departments | LSE > Research Centres > Financial Markets Group |
| Date Deposited | 19 May 2023 |
| URI | https://researchonline.lse.ac.uk/id/eprint/119090 |