Monetary Policy and Homeowner Mobility: The Effect of Mortgage interest Rates

This paper tests the "lock-in" effect of mortgage contract terms and establishes the link between changes in market interest rates and homeowner mobility. The analysis is based on the Panel Study of Income Dynamics during 1990-1993, when mortgage interest rates declined by almost 30 percent

Real Estate Prices and Economic Cycles

Real Estate Prices, Economic Cycles

Federal credit and insurance programs: housing

This paper reviews the evolution of the major credit and insurance programs undertaken by the U.S. government in support of urban housing. As the review makes clear, the Federal Housing Administration (FHA), Veterans Administration, Federal National Mortgage Association, and Federal Home Loan Mortgage Corporation have played major roles in the development of liberal and efficient primary and secondary mortgage markets in the United States. The development of capacity in mortgage lending and securitization in the private sector does suggest, however, that federally subsidizing mortgage market activities can be restrained with little effect on homeownership-the principal goal of this federal activity. In particular, the orderly reduction in the mortgage investment activities of the government-sponsored enterprises (GSEs) and the imposition of guarantee fees on mortgage-backed securities insured by the GSEs are first steps in restraining federal activity. More generally, a concentration of FHA and GSE activity on first-time homebuyers would reduce federal risk exposure while preserving the economic rationale for government activity.Mortgage loans ; Housing - Finance

Some comments on Monte Carlo and molecular dynamics methods

We highlight some links between molecular dynamics and Monte Carlo algorithms used to simulate condensed matter systems. Special attention is paid to the question of sampling the desired statistical ensemble

A dynamic policy model to manage temporal performance amongst contracting firms in a competitive situation

Studies have been conducted to measure competitiveness in the construction industry. Such research has focused on all levels from the national picture to individual projects. While useful, the results are limited in that they present a snapshot picture at one point in time. Moreover, they do not suggest how under-performance might be improved. The research reported here is part of a large collaborative study to evaluate sustained competitiveness in the UK construction industry. It enhances previous research in that a system dynamics model of contracting firms operating in competition is used to not only measure each firm’s temporal performance by means of a dynamic competitive index, but it can also suggest high leverage policies which mitigate against under-performance. The model structure is described and simulated scenario runs presented. Besides the contribution to strategic policy making at the level of the contracting firm, the exemplar shows that the system dynamics methodology could have significant utility in the field of construction management

Elicitation of structured engineering judgement to inform a focussed FMEA

The practical use of Failure Mode and Effects Analysis (FMEA) has been criticised because it is often implemented too late and in a manner that does not allow information to be fed-back to inform the product design. Lessons learnt from the use of elicitation methods to gather structured expert judgement about engineering concerns for a new product design has led to an enhancement of the approach for implementing design and process FMEA. We refer to this variant as a focussed FMEA since the goal is to enable relevant engineers to contribute to the analysis and to act upon the outcomes in such a way that all activities focus upon the design needs. The paper begins with a review of the proposed process to identify and quantify engineering concerns. The pros and cons of using elicitation methods, originally designed to support construction of a Bayesian prior, to inform a focussed FMEA are analysed and a comparison of the proposed process in relation to the existing standards is made. An industrial example is presented to illustrate customisation of the process and discuss the impact on the design process

Spatial effects upon employment outcomes: the case of New Jersey teenagers

Employment (Economic theory) ; Econometric models ; Income distribution ; New Jersey

Price Discovery in Time and Space: The Course of Condominium Prices in Singapore

Despite evidence that aggregate housing price are predictable, a random walk in time and independence in space are two maintained hypotheses in the empirical models for housing price measurement used by government and commercial companies. This paper examines the price discovery process in individual dwellings over time and space by relaxing both assumptions, using data from the Singapore private condominium market. We develop a model that tests directly the hypotheses that the prices of individual dwellings follow a random walk over time and that the price of an individual dwelling is independent of the price of a neighboring dwelling. The model is general enough to include other widely used models of housing price determination, such as Bailey, Muth, and Nourse (1963), Case and Shiller (1987) and Redfearn and Quigley (2000), as special cases. The empirical results clearly support mean reversion in housing prices and also diffusion of innovations over space. Our estimates of the level of housing prices, derived from a generalized repeat sales model, suggest that serial and spatial correlation matters in the computation of price indices and the estimation of price levels. investment returns is completely absent.