A Closer Look at the Behavior of Uncertainty and Disagreement: Micro Evidence from the Euro Area
This paper examines point and density forecasts of real GDP growth, inflation and unemployment from the European Central Bank?s Survey of Professional Forecasters. We present individual uncertainty measures and introduce individual point- and density-based measures of disagreement. The data indicate substantial heterogeneity and persistence in respondents? uncertainty and disagreement, with uncertainty associated with prominent respondent effects and disagreement associated with prominent time effects. We also examine the co-movement between uncertainty and disagreement and find an ...
How mortgage finance affects the urban landscape
This chapter considers the structure of mortgage finance in the U.S., and its role in shaping patterns of homeownership, the nature of the housing stock, and the organization of residential activity. We start by providing some background on the design features of mortgage contracts that distinguish them from other loans, and that have important implications for issues presented in the rest of the chapter. We then explain how mortgage finance interacts with public policy, particularly tax policy, to influence a household?s decision to own or rent, and how shifts in the demand for ...
A Better Measure of First-Time Homebuyers
Much of the concern about affordable homeownership has focused on first-time buyers. These buyers, who are often making the transition from renting to owning, can find it difficult to save to meet down-payment requirements; this is particularly true in those areas where rent takes up a significant portion of a household's monthly income. In contrast to first-time buyers, repeat buyers can typically rely on the equity in their current house to help fund the down payment on a trade-up purchase; they also have an easier time qualifying for a new mortgage if they've successfully made payments on ...
Heterogeneity and the Effects of Aggregation on Wage Growth
This paper focuses on the implications of alternative methods of aggregating individual wage data for the behavior of economy-wide wage growth. The analysis is motivated by evidence of significant heterogeneity in individual wage growth and its cyclicality. Because of this heterogeneity, the choice of aggregation will affect the properties of economy-wide wage growth measures. To assess the importance of this consideration, we provide a decomposition of wage growth into aggregation effects and composition effects and use the decomposition to compare growth in an average wage—specifically ...
The effect of employee stock options on the evolution of compensation in the 1990s
Between 1995 and 1998, actual growth in compensation per hour (CPH) accelerated from approximately 2 percent to 5 percent. Yet as the labor market continued to tighten in 1999, CPH growth unexpectedly slowed. This article explores whether this aggregate "wage puzzle" can be explained by changes in the pay structure?specifically, by the increased use of employee stock options in the 1990s. The CPH measure captures these options on their exercise date, rather than on the date they are granted. By recalculating compensation per hour to reflect the options' value on the grant date, the ...
Testimony on housing finance reform: essential elements of a government guarantee for mortgage-backed securities
Testimony before the U.S. Senate Committee on Banking, Housing and Urban Affairs, Washington, D.C.
A look at real housing prices and incomes: some implications for housing affordability and quality
This paper was presented at the conference "Unequal incomes, unequal outcomes? Economic inequality and measures of well-being" as part of session 2, " Affordability of housing for young and poor families." The conference was held at the Federal Reserve Bank of New York on May 7, 1999. The authors report that the cost of good housing has risen for low-income individuals. The National Association of Realtors affordability index shows that affordability conditions are better today than at any time in the past twenty-five years. However, Gyourko and Tracy's analysis suggests that this ...
Exchange rates and wages
Understanding the effects of exchange rate fluctuations across the population is important for increasingly globalized economies. Previous studies using industry aggregate data have found that industry wages are significantly more responsive than industry employment to exchange rate changes. We offer an explanation for this paradoxical finding. Using Current Population Survey data for 1976 through 1998, we document that the main mechanism for exchange rate effects on wages occurs through job turnover and the strong consequences this has for the wages of workers undergoing such job ...
Juvenile delinquent mortgages: bad credit or bad economy?
We study early default, defined as serious delinquency or foreclosure in the first year, among nonprime mortgages from the 2001 to 2007 vintages. After documenting a dramatic rise in such defaults and discussing their correlates, we examine two primary explanations: changes in underwriting standards that took place over this period and changes in the economic environment. We find that while credit standards were important in determining the probability of an early default, changes in the economy after 2004 - especially a sharp reversal in house price appreciation - were the more critical ...
The shape of the recovery
Remarks at the Connecticut Business and Industry Association/MetroHartford Alliance Economic Summit and Outlook 2011, Hartford, Connecticut