Mortgage Design and Slow Recoveries: The Role of Recourse and Default

• 成果类型: Article
• 署名作者: Gete, Pedro; Zecchetto, Franco
• 署名单位: IE University
• 刊物名称: REVIEW OF ECONOMIC STUDIES
• ISSN/ISSBN: 0034-6527
• DOI: 10.1093/restud/rdad055
• 发表日期: 2024
• 页码: 1039-1084
• 关键词: monetary-policy; precautionary savings; consumer bankruptcy; liquidity trap; consumption; credit; debt; RISK; shocks; MODEL

摘要

We show that mortgage recourse systems, by discouraging default, magnify the impact of nominal rigidities. They cause deeper and more persistent recessions. This mechanism can account for up to 31% of the recovery gap during the Great Recession between the U.S., mostly a non-recourse economy, and Spain, a recourse economy. General equilibrium effects explain most of the differences between mortgage systems. With recourse, highly indebted homeowners dramatically cut consumption in a crisis, and account for a larger share of the aggregate consumption decline. However, without recourse, mortgages would be more expensive for riskier households, and homeownership rates would be lower.