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Introduction Adelino et al. (2016) Greenwald (2016) Gete and Reher (2016) Discussion of Papers: Ground Zero: Housing and the Mortgage Market Paul S. Willen 3rd Annual Golub Center for Finance and Policy Conference MIT September 29, 2016

Introduction Adelino et al. (2016) Greenwald (2016) Gete and Reher (2016) Discussion of Papers: Ground Zero: Housing and the Mortgage Market Paul S. Willen 3rd Annual Golub Center for Finance and Policy Conference MIT September 29, 2016 Willen (FRB Boston and NBER) Housing Discussion September 29, 2016 1 / 11
Introduction Adelino et al. (2016) Greenwald (2016) Gete and Reher (2016) Disclaimer • I am speaking today as a researcher and as a concerned citizen • not as a representative of: • The Boston Fed • or the Federal Reserve System • When I say “we”, I don’t mean Janet and me. Willen (FRB Boston and NBER) Housing Discussion September 29, 2016 2 / 11
Introduction Adelino et al. (2016) Greenwald (2016) Gete and Reher (2016) Disclaimer • I am speaking today as a researcher and as a concerned citizen • not as a representative of: • The Boston Fed • or the Federal Reserve System • When I say “we”, I don’t mean Janet and me. Willen (FRB Boston and NBER) Housing Discussion September 29, 2016 2 / 11
Introduction Adelino et al. (2016) Greenwald (2016) Gete and Reher (2016) Disclaimer • I am speaking today as a researcher and as a concerned citizen • not as a representative of: • The Boston Fed • or the Federal Reserve System • When I say “we”, I don’t mean Janet and me. Willen (FRB Boston and NBER) Housing Discussion September 29, 2016 2 / 11
Introduction Adelino et al. (2016) Greenwald (2016) Gete and Reher (2016) Disclaimer • I am speaking today as a researcher and as a concerned citizen • not as a representative of: • The Boston Fed • or the Federal Reserve System • When I say “we”, I don’t mean Janet and me. Willen (FRB Boston and NBER) Housing Discussion September 29, 2016 2 / 11
Introduction Adelino et al. (2016) Greenwald (2016) Gete and Reher (2016) Disclaimer • I am speaking today as a researcher and as a concerned citizen • not as a representative of: • The Boston Fed • or the Federal Reserve System • When I say “we”, I don’t mean Janet and me. Willen (FRB Boston and NBER) Housing Discussion September 29, 2016 2 / 11
Introduction Adelino et al. (2016) Greenwald (2016) Gete and Reher (2016) Disclaimer • I am speaking today as a researcher and as a concerned citizen • not as a representative of: • The Boston Fed • or the Federal Reserve System • When I say “we”, I don’t mean Janet and me. Willen (FRB Boston and NBER) Housing Discussion September 29, 2016 2 / 11
Introduction Adelino et al. (2016) Greenwald (2016) Gete and Reher (2016) Two different views Willen (FRB Boston and NBER) Housing Discussion September 29, 2016 3 / 11
Introduction Adelino et al. (2016) Greenwald (2016) Gete and Reher (2016) Two different views Willen (FRB Boston and NBER) Housing Discussion September 29, 2016 3 / 11
Introduction Adelino et al. (2016) Greenwald (2016) Gete and Reher (2016) Explaining the boom Credit Expansion • Credit Expansion in early 2000s • Unconstrained borrowers? • Wealth effects? • Helped constrained borrowers • Marginal borrowers • Relative balance sheet shift in debt to • Constrained borrowers constrained • Drive up house prices (also relaxes • Old Question: Why credit expansion? constraints) • Revisit shift Willen (FRB Boston and NBER) Housing Discussion September 29, 2016 4 / 11
Introduction Adelino et al. (2016) Greenwald (2016) Gete and Reher (2016) Explaining the boom Constrained Low Income Low Credit Score Credit Expansion • Credit Expansion in early 2000s • Unconstrained borrowers? • Wealth effects? • Helped constrained borrowers • Marginal borrowers • Relative balance sheet shift in debt to • Constrained borrowers constrained • Drive up house prices (also relaxes • Old Question: Why credit expansion? constraints) • Revisit shift Willen (FRB Boston and NBER) Housing Discussion September 29, 2016 4 / 11
Introduction Adelino et al. (2016) Greenwald (2016) Gete and Reher (2016) Explaining the boom Constrained Low Income Low Credit Score Credit Expansion Unconstrained High Income High Credit Score • Credit Expansion in early 2000s • Unconstrained borrowers? • Wealth effects? • Helped constrained borrowers • Marginal borrowers • Relative balance sheet shift in debt to • Constrained borrowers constrained • Drive up house prices (also relaxes • Old Question: Why credit expansion? constraints) • Revisit shift Willen (FRB Boston and NBER) Housing Discussion September 29, 2016 4 / 11
Introduction Adelino et al. (2016) Greenwald (2016) Gete and Reher (2016) Explaining the boom Constrained Low Income Low Credit Score Credit Expansion Unconstrained High Income High Credit Score • Credit Expansion in early 2000s • Unconstrained borrowers? • Wealth effects? • Helped constrained borrowers • Marginal borrowers • Relative balance sheet shift in debt to • Constrained borrowers constrained • Drive up house prices (also relaxes • Old Question: Why credit expansion? constraints) • Revisit shift Willen (FRB Boston and NBER) Housing Discussion September 29, 2016 4 / 11
Introduction Adelino et al. (2016) Greenwald (2016) Gete and Reher (2016) Explaining the boom Constrained Low Income Low Credit Score Credit Expansion Unconstrained High Income High Credit Score • Credit Expansion in early 2000s • Unconstrained borrowers? • Wealth effects? • Helped constrained borrowers • Marginal borrowers • Relative balance sheet shift in debt to • Constrained borrowers constrained • Drive up house prices (also relaxes • Old Question: Why credit expansion? constraints) • Revisit shift Willen (FRB Boston and NBER) Housing Discussion September 29, 2016 4 / 11
Introduction Adelino et al. (2016) Greenwald (2016) Gete and Reher (2016) Explaining the boom Constrained Low Income Low Credit Score Credit Expansion Unconstrained High Income High Credit Score • Credit Expansion in early 2000s • Unconstrained borrowers? • Wealth effects? • Helped constrained borrowers • Marginal borrowers • Relative balance sheet shift in debt to • Constrained borrowers constrained • Drive up house prices (also relaxes • Old Question: Why credit expansion? constraints) • Revisit shift Willen (FRB Boston and NBER) Housing Discussion September 29, 2016 4 / 11
Introduction Adelino et al. (2016) Greenwald (2016) Gete and Reher (2016) Explaining the boom Constrained Low Income Low Credit Score Credit Expansion Unconstrained High Income High Credit Score • Credit Expansion in early 2000s • Unconstrained borrowers? • Wealth effects? • Helped constrained borrowers • Marginal borrowers • Relative balance sheet shift in debt to • Constrained borrowers constrained • Drive up house prices (also relaxes • Old Question: Why credit expansion? constraints) • Revisit shift Willen (FRB Boston and NBER) Housing Discussion September 29, 2016 4 / 11
Introduction Adelino et al. (2016) Greenwald (2016) Gete and Reher (2016) Explaining the boom Constrained Low Income Low Credit Score Credit Expansion Unconstrained High Income High Credit Score • Credit Expansion in early 2000s • Unconstrained borrowers? • Wealth effects? • Helped constrained borrowers • Marginal borrowers • Relative balance sheet shift in debt to • Constrained borrowers constrained • Drive up house prices (also relaxes • Old Question: Why credit expansion? constraints) • Revisit shift Willen (FRB Boston and NBER) Housing Discussion September 29, 2016 4 / 11
Introduction Adelino et al. (2016) Greenwald (2016) Gete and Reher (2016) Explaining the boom Constrained Low Income Low Credit Score Credit Expansion Unconstrained High Income High Credit Score • Credit Expansion in early 2000s • Unconstrained borrowers? • Wealth effects? • Helped constrained borrowers • Marginal borrowers • Relative balance sheet shift in debt to • Constrained borrowers constrained • Drive up house prices (also relaxes • Old Question: Why credit expansion? constraints) • Revisit shift Willen (FRB Boston and NBER) Housing Discussion September 29, 2016 4 / 11
Introduction Adelino et al. (2016) Greenwald (2016) Gete and Reher (2016) Explaining the boom Constrained Low Income Low Credit Score Credit Relative Shift Expansion Unconstrained High Income High Credit Score • Credit Expansion in early 2000s • Unconstrained borrowers? • Wealth effects? • Helped constrained borrowers • Marginal borrowers • Relative balance sheet shift in debt to • Constrained borrowers constrained • Drive up house prices (also relaxes • Old Question: Why credit expansion? constraints) • Revisit shift Willen (FRB Boston and NBER) Housing Discussion September 29, 2016 4 / 11

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