On the economic impacts of mortgage credit expansion policies: Evidence from help to buy

Carozzi, Felipe; Hilber, Christian A.L.; Yu, Xiaolun

doi:10.1016/j.jue.2023.103611

Cited by 7 publications

(2 citation statements)

References 32 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…87 Carozzi et al (2024) examinan los programas públicos de ayuda a la compra (Help to Buy) en Reino Unido en forma de préstamos públicos del 20 % para la compra de vivienda (40 % en Londres y su área metropolitana). Los resultados indican que este programa ocasionó un aumento de los precios de compraventa de vivienda en el área urbana de Londres, no incrementó la oferta de vivienda y no redujo los problemas de accesibilidad, a la vez que aumentaron las ganancias de los promotores.…”

Section: Las Políticas Públicasunclassified

Informe Anual 2023

2024

Informe Anual

View full text Add to dashboard Cite

Los desarrollos macroeconómicos recientesEl devenir de la economía mundial en 2023 estuvo caracterizado por un dinamismo mayor del esperado, a pesar del tono restrictivo de la política monetaria y de la elevada incertidumbre geopolítica. Esta resistencia, que ha sido heterogénea por áreas geográficas, se ha basado, en parte, en el vigor del empleo observado en la mayoría de las economías y, en algunas regiones, en el apoyo de la política fiscal.

show abstract

Section: Las Políticas Públicasunclassified

Informe Anual 2023

2024

Informe Anual

View full text Add to dashboard Cite

show abstract

“…87 Carozzi et al (2024) analyse the Help to Buy schemes in the United Kingdom whereby government-funded equity loans of up to 20% of the purchase price (40% in London and its metropolitan area) are available to buyers. The findings suggest that, as a result of this programme, house prices in London climbed, there was no increase in the housing supply, affordability difficulties did not ease and developers' profits rose.…”

Section: Possible Future Measuresmentioning

confidence: 99%

Annual Report 2023

2024

Annual Report

View full text Add to dashboard Cite

Recent macroeconomic developmentsDespite the restrictive stance of monetary policy and the high level of geopolitical uncertainty, in 2023 the world economy grew more than expected. This resilience, which varied across geographical areas, was partly underpinned by strong employment in most economies and, in some regions, fiscal policy support.Mention should also be made of disinflation, which was mainly driven by the fall in energy commodity prices, the fading of the supply shocks observed in recent years and monetary policy tightening. Against this background, central banks in emerging economies started to ease their restrictive monetary policy stance, while their counterparts in the main advanced economies paused their interest rate hiking cycles. However, euro area economic activity was observably weak, with the German economy notably sluggish and even contracting slightly. Inflation slowed more than expected and has fallen by 8.2 percentage points (pp) since October 2022 (2.8 pp since March 2023 in the case of core inflation), as the monetary policy of the European Central Bank (ECB) -which set the deposit facility rate at 4% in September -continued to be transmitted forcefully to financing conditions. Amid monetary tightening, weak euro area growth and high uncertainty, the Spanish economy stood out as it recorded growth (2.5%) significantly above the euro area average (0.4%) and initial expectations. As a result, at end-2023 GDP was around 3% higher than its pre-pandemic level. However, GDP per capita in Spain had only risen by 0.3% since end-2019 (against a background of high immigration flows over the last two years), in contrast to the euro area where it stood 2% above its pre-pandemic level.GDP growth was mainly driven by buoyancy in household spending (underpinned by strong job creation amid sliding productivity), government consumption and external demand, while business investment proved considerably sluggish. The high growth rates of tourism-related services explained around one-half of growth in 2023.Meanwhile, the private sector has continued to deleverage, with its debt now down 94 pp of GDP from the peak of 2010. In addition, Spain's current account surplus increased and its negative net international investment position decreased by 7 pp, to 52.8% of GDP, 45 pp below the all-time high recorded in 2014. Meanwhile, the budget deficit and government debt as a percentage of GDP also fell, but they nevertheless remain at high levels.11 Annual Report 2023 -Banco de España FOREWORD BY THE GOVERNOR 11The disinflation process, which began in 2022 Q3, continued in 2023, driven mainly by lower energy prices, while food and core inflation slowed more gradually. In addition, the slowdown in unit profits cushioned the impact of the growth of compensation per employee. The outlook for the coming yearsAgainst a backdrop of high geopolitical uncertainty, global economic growth is expected to stabilise at around 3.2% over the coming years, significantly below that observed over the last two decades (3.8%). Some ...

show abstract

Access to housing credit and marriage: evidence from redlining maps

Madaleno

2024

Rev Econ Household

View full text Add to dashboard Cite

This study evaluates the impact of a policy popularly known as “redlining” on marriage. This policy led to the creation of a series of maps that guided banks in their lending, where some areas were favored and others were discriminated against. Given the quasi-randomness of mortgage discrimination, this policy allows us to make inferences regarding whether housing credit constraints affect marriage. Furthermore, it also provides insight into whether unequal access to housing credit played a role in the contemporary racial marriage gap. This policy allows us to make these inferences due to the fact that neighborhood blocks that were more heavily discriminated against had higher proportions of Black residents. The study uses a spatial differences in discontinuities design to show that the maps led to a reduction in marriage in discriminated areas. These effects are shown to not be due to sorting. They can also be ascribed to the housing credit mechanism per se, rather than competing second-order mechanisms that result from individuals being denied mortgages. These second-order effects can include, for instance, neighborhood decline effects found in other redlining work.

show abstract

On the economic impacts of mortgage credit expansion policies: Evidence from help to buy

Cited by 7 publications

References 32 publications

Informe Anual 2023

Informe Anual 2023

Annual Report 2023

Access to housing credit and marriage: evidence from redlining maps

Contact Info

Product

Resources

About