Government Policies, Residential Mortgage Defaults and the Boom and Bust Cycle of Housing Prices

2014 ◽  
Vol 42 (3) ◽  
pp. 627-661 ◽  
Author(s):  
Marius Ascheberg ◽  
Robert A. Jarrow ◽  
Holger Kraft ◽  
Yildiray Yildirim
SERIEs ◽  
2021 ◽  
Author(s):  
Miguel Ángel Borrella-Mas ◽  
Martin Rode

AbstractEver since the spectacular boom and bust cycle of the Spanish real estate industry, endemic corruption at the local level has become a widely recognized problem in the national public discourse. In an effort to expose an under-explored political determinant, this paper investigates the effect of local and regional alignment in fomenting corruption at the Spanish municipal level. To do so, we construct an ample panel dataset on the prevalence of corrupt practices by local politicians, which is employed to test the possible impact of partisan alignment in three consecutive joint municipal and regional elections. Findings show aligned municipalities to be more corrupt than non-aligned ones, an effect that is further associated with absolute majorities at both levels of government and higher capital transfers. By contrast, we also show that “throwing the rascals out” could be an effective strategy for curbing the corrupt practices of aligned municipalities. This indicates that the democratic political process may be effective in corruption control if agreements can be reached to remove corrupt politicians or parties from power.


Author(s):  
Michael Haliassos ◽  
Gikas Hardouvelis ◽  
Margarita Tsoutsoura ◽  
Dimitri Vayanos

This chapter reviews the developments in Greece's financial system since the beginning of the crisis. The chapter places them in a broader context by (i) evaluating the long-term performance of Greece's financial system in comparison to other countries, and (ii) reviewing the credit boom-and-bust cycle that Greece has experienced since Euro entry. Risks in the Greek economy remain overly concentrated to those originating them and are not well diversified. By raising the cost of equity capital for firms, this impedes investment. It also drives up corporate leverage, thus making the economy more vulnerable to shocks. These vulnerabilities manifested themselves even before the sovereign crisis hit. Strengthening investor protection, through improvements in the justice system and financial regulation, is an important part of the solution. In the shorter run, the debt overhang problem in the private sector should be addressed. The chapter discusses policy options to achieve these goals.


Subject Global liquidity trends. Significance Concerns over global liquidity have resurfaced since late 2014, both in advanced and emerging markets (EMs). Both central banks and the IMF note that market liquidity has declined, especially in bond markets, due to stricter regulations on derivatives trading in advanced economies, lower sovereign bonds demand in some countries and the end of the credit boom in some EMs. Global liquidity is a loosely defined concept that can be interpreted in different ways and covers a variety of countries and market realities. Impacts Liquidity is highly cyclical and follows a 'boom and bust' cycle. Accomodative monetary policy and financial regulation may partly offset the exposure to global liquidity volatility. US monetary policy tightening could exacerbate an EM crisis, where corporates have heavily issued dollar-denominated debt. The ECB monetary policy will remain accommodative until at least March 2017 partly offsetting risks of a global liquidity shortage.


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