My broad research interests are in applied macroeconomics, monetary and fiscal policy, and public finance. My current area of research is focused on federal credit policy interventions in U.S. mortgage markets.
The Macroeconomic Effects of Government Asset Purchases: Evidence from Postwar U.S. Housing Credit Policy, joint with Karel Mertens and Morten O. Ravn, Quarterly Journal of Economics, 133 (3): 1503-1560. Online appendices.
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.
Credit policies can expand targeted lending volumes by subsidizing private credit risks, and an expansion in targeted lending may crowd out other loans. I document that U.S. housing credit policies subsidizing an expansion in residential mortgage lending unintentionally crowd out commercial lending and related real activity. I use a long history of regulatory changes for exogenous variation in the mortgage purchases of Fannie Mae and Freddie Mac, government-sponsored enterprises that subsidize mortgage borrowing. Regulatory shocks to subsidized mortgage purchases crowd in private home mortgage lending while unintentionally crowding out commercial mortgages and loans. U.S. housing credit policies similarly reallocate construction activity toward housing and away from commercial real estate, negating any intended stimulus to aggregate construction or employment. I contribute evidence that the transmission of such mortgage purchases operates through a mortgage origination channel and a safe asset supply channel, which induce significant reallocations in bank lending. I explore implications for unwinding the Federal Reserve’s mortgage holdings and eventual reforms to Fannie and Freddie.
A Narrative Analysis of Mortgage Asset Purchases by Federal Agencies, joint with Karel Mertens, NBER Working Paper No. 23165 (updated July 2017). Online appendix.
This paper provides a narrative analysis of regulatory policy changes affecting the purchases and holdings of mortgages and related securities of five US government entities over the 1968–2014 period. We focus on federal government policies that aim to influence the allocation and/or volume of the supply of residential mortgage credit. We use contemporary primary sources and various institutional histories to identify significant policy interventions, to document their economic and regulatory context, surrounding motives, and pertinent timing, as well as to quantify projected impacts on agencies’ mortgage holdings. Finally, we classify each significant policy change as either “cyclically motivated” or “unrelated to the business and/or financial cycle.”
Work in Progress
Government-sponsored Secondary Mortgage Markets: Automatic Stabilizer for Housing?
Research Grants and Awards
Graduate School Conference Travel Grant, Cornell University, Fall 2018.
Dissertation Fellowship, Federal Reserve Board of Governors, Summer 2018.
Graduate School Conference Travel Grant, Cornell University, Spring 2018.
Graduate School Research Travel Grant, Cornell University, Fall 2017.
L.R. “Red” Wilson MA ‘67 Excellence in Economics Medal and Research Prize, Fall 2015.