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Housing And The Macroeconomy, Emily Corinne Marshall
Housing And The Macroeconomy, Emily Corinne Marshall
Theses and Dissertations--Economics
This dissertation studies the impact of several different housing market features on the macroeconomy.
Chapter 1 augments the New-Keynesian model with collateral constraints to incorporate long-term debt in order to examine the interaction between multi-period loans, leverage, and indeterminacy. Allowing firms to borrow heavily against commercial housing by increasing the loan-to-value ratio from 0.01 to 0.90 reduces the level of steady state output approximately 3.19% and decreases social welfare. In contrast, increasing the debt limit of households increases steady state output by 2.72%. Social welfare is maximized under a utilitiarian function when households can borrow at a loan-to-value ratio of …