Tipping Points III: Debt-Financed Homeownership – Its Evolution, Impact, and Future

Abstract

Papers from Tipping Points III: Debt-Financed Homeownership – Its Evolution, Impact, and Future. This conference examines the way that home ownership has been financed in the United States and its impact on the finances of American households.

Tipping Points III:

Debt-Financed Homeownership – Its Evolution, Impact, and Future

Washington D.C.

October 2018

The Private Debt Project and the St. Louis Federal Reserve Bank’s Center for Household Financial Stability are proud to present the third of our annual “Tipping Points” Household Debt Symposia. While Tipping Points I and II asked about the micro and macroeconomic impacts of the household debt, Tipping Points III examines the economics of the American debt-financed homeownership model and its centrality to American housing policy and the American household’s balance sheet. Has this model worked or has it led to financial instability and inequality? Is this model successful or broken and can it be fixed? These are some of the questions our papers try to answer. We wish to thank the Aspen Institute’s Financial Security Program for hosting this conference and providing logistical support. All papers are preliminary working versions. 

Executive Summary 

Ray Boshara, Director, Center for Household Financial Stability, Federal Reserve Bank of St. Louis

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Introduction

“Mortgaging Household and Global Financial Stability: To What End?”

William R. Emmons, Assistant Vice President, Federal Reserve Bank of St. Louis
Ana H. Kent, Policy Analyst, Federal Reserve Bank of St. Louis

Lowell R. Ricketts, Lead Analyst, Federal Reserve Bank of St. Louis

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Session 1 — Homeownership and the Household Balance Sheet

“Do Changes in Mortgage Credit Constraints Explain the Housing Boom and Bust?”

Andra C. Ghent, University of Wisconsin-Madison

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“Modigliani Meets Minsky: American Household Debt, 1949-2016”

Moritz Shularick et. al., University of Bonn 

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Session 2 — From the American Dream of Mortgage-Financed Homeownership to Risky Debt Accumulation?

“The Distribution of Risk and the Great Recession: Old Problems, New Crises”

Thomas Herndon, Loyola Marymount University 

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“The Case for Homeownership”

Alana McCargo, The Urban Institute 

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Keynote Conversation – Debt-Financed Homeownership: Is it Worth the Risks? What is its Future?

Sarah Rosen Wartell, President, Urban Institute

Paul Willen, Senior Economist, Federal Reserve Bank of Boston

Michael Stegman, Senior Research Fellow, Federal Reserve Bank of St. Louis

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Session 3 — Restoring or Rethinking the American Dream

“Ten Years Since the Financial Crisis: Some Lessons for Reducing Risks to Households”

Jane Dokko, Economist and Assistant Vice President, Federal Reserve Bank of Chicago

Karen Dynan, Professor of the Practice of Economics, Harvard University

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“Republican Home-Owning”

Robert Hockett, Cornell University School of Law 

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