What is the role of the financial sector in explaining business cycles? This question is as old
as the field of macroeconomics, and an extensive body of research conducted since the …

We propose a theory of indebted demand, capturing the idea that large debt burdens lower
aggregate demand, and thus the natural rate of interest. At the core of the theory is the …

A model in which homebuyers make a modest approximation leads house prices to display
three features present in the data but usually missing from rational models: momentum at …

I investigate how the structure of the mortgage market influences macroeconomic dynamics,
using a general equilibrium framework with prepayable debt and a limit on the ratio of …

The role of real estate during the global financial and economic crisis has prompted efforts to
better incorporate housing and financial channels into macro models, improve housing …

This paper studies a quantitative general equilibrium model of housing. The model has two
key elements not previously considered in existing quantitative macro studies of housing …

During the pre‐crisis period, Europe experienced substantial cross‐country variation in
domestic credit growth and cross‐border capital flows. We investigate the inter‐relations …

In this chapter, we review and discuss the large body of research that has developed over
the past 10-plus years that explores the interconnection of macroeconomics, finance, and …

In this paper, we first compare house price cycles in advanced and emerging economies
using a new quarterly house price data set covering the period 1990–2012. We find that …

Identifying the effects of “flights to safety” on asset prices using pure time-series methods is
difficult because crises are infrequent. We develop a new cross-sectional identification …