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The Macroeconomic Effects of Government Asset Purchases: Evidence from Postwar U.S. Housing Credit Policy

Fieldhouse, A; Mertens, K; Ravn, MO; (2018) The Macroeconomic Effects of Government Asset Purchases: Evidence from Postwar U.S. Housing Credit Policy. Quarterly Journal of Economics , 133 (3) pp. 1503-1560. 10.1093/qje/qjy002. Green open access

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Abstract

We document the portfolio activity of federal housing agencies and provide evidence on its impact on mortgage markets and the economy. Through a narrative analysis, we identify historical policy changes leading to expansions or contractions in agency mortgage holdings. Based on those regulatory events that we classify as unrelated to short-run cyclical or credit market shocks, we find that an increase in mortgage purchases by the agencies boosts mortgage lending, in particular refinancing, and lowers mortgage rates. Agency purchases also influence prices in other asset markets, stimulate residential investment, and expand homeownership. We compare these effects to those of conventional monetary policy shocks, and we provide evidence on the interactions between housing credit and monetary policies.

Type: Article
Title: The Macroeconomic Effects of Government Asset Purchases: Evidence from Postwar U.S. Housing Credit Policy
Open access status: An open access version is available from UCL Discovery
DOI: 10.1093/qje/qjy002
Publisher version: https://doi.org/10.1093/qje/qjy002
Language: English
Additional information: Copyright © The Author 2018. Published by Oxford University Press on behalf of the President and Fellows of Harvard College. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted reuse, distribution, and reproduction in any medium, provided the original work is properly cited.
UCL classification: UCL > Provost and Vice Provost Offices
UCL > Provost and Vice Provost Offices > UCL SLASH
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of SandHS > Dept of Economics
URI: http://discovery.ucl.ac.uk/id/eprint/10041333
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