Welfare implications of the transition to high household debt
By: Jeffrey R. Campbell, Zvi Hercowitz
Contributors: Hercowitz, Zvi; Federal Reserve Bank of Chicago. Research Department
Series: Working paper series -- WP-2006-27; Working paper series (Federal Reserve Bank of Chicago. Research Department : Online) -- WP-2006-27.
Publisher: Federal Reserve Bank of Chicago
Published: 2006
Place of publication: Chicago, Ill.]
Language: eng
Format: [electronic resource] /
Description: "Aggressive deregulation of the mortgage market in the early 1980s triggered innovations that greatly reduced the required home equity of U.S.  households.  This allowed households to cash-out a large part of accumulated equity, which equaled 71 percent of GDP in 1982.  A borrowing surge followed: Household debt increased from 43 to 62 percent of GDP in the 1982- 2000 period.  What are the welfare implications of such a reform for borrowers and savers? This paper uses a calibrated general equilibrium model of lending from the wealthy to the middle class to evaluate these effects quantitatively"--Federal Reserve Bank of Chicago web site.
Notes: Title from PDF file as viewed on 1/18/2007.

Includes bibliographical references.

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