The effects of mortgage prepayments on m2
By: Yueh-Yun C. O'Brien.
Series: Finance and economics discussion series ;; 2005-43; Finance and economics discussion series (Online) ;; 2005-43.
Publisher: Federal Reserve Board
Published: 2005
Place of publication: Washington, D.C
Language: eng
Format: Electronic resource
Description: "Mortgage prepayments can contribute significantly to fluctuations in M2 growth rates.  These mortgage prepayment effects are primarily driven by certain rules of mortgage-backed-security (MBS) insurers that require mortgage servicers to hold in M2-type deposits the prepayment proceeds due to MBS investors.  This paper provides a methodology for estimating prepayment effects on M2.  The effects are estimated separately for refinancing and home sales.  The results indicate that excluding the mortgage prepayment effects from M2 produces smoother monthly growth rates.  The stability of the relationship between money and GDP as measured by M2 velocity is also increased.  Refinancing prepayments account for most of the prepayment effects on M2"--Federal Reserve Board web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 10/28/2005.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.