Second Mortgages and Household Saving

Second mortgages accounted for 10.8% of the stock of outstanding mortgage debt at the end of 1987, up from 3.6% at the beginning of the 198Os. This paper investigates the determinants of second mortgage borrowing and the characteristics of second mortgage borrowers. We first calculate the outstanding stock of home equity that remains to be borrowed against on tax-preferred terms, recognizing the limits on interest deductions in the 1986 Tax Reform Act and the 1987 Omnibus Budget Reconciliation Act. Despite these limits, we estimate that more than two trillion dollars of housing equity remains to be borrowed against by current homeowners. We then present cross-sectional evidence suggesting that households who obtain second mortgages after purchasing a home ace less wealthy than other households with similar characteristics. Each dollar of second mortgage borrowing is associated with a seventy-five cent reduction in household net worth. While these results cannot be given a causal interpretation, they are consistent with the view that increased access to second mortgages has reduced personal saving.

Stable Nonlinear Identification From Noisy Repeated Experiments via Convex Optimization

This paper introduces new techniques for using convex optimization to fit input-output data to a class of stable nonlinear dynamical models. We present an algorithm that guarantees consistent estimates of models in this class when a small set of repeated experiments with suitably independent measurement noise is available. Stability of the estimated models is guaranteed without any assumptions on the input-output data. We first present a convex optimization scheme for identifying stable state-space models from empirical moments. Next, we provide a method for using repeated experiments to remove the effect of noise on these moment and model estimates. The technique is demonstrated on a simple simulated example

Radio astronomy

The activities of the Deep Space Network in support of radio and radar astronomy operations during July and August 1980 are reported. A brief update on the OSS-sponsored planetary radio astronomy experiment is provided. Also included are two updates, one each from Spain and Australia on current host country activities