Got Hurt for What You Paid? Revisiting Government Subsidy in the U.S. Mortgage Market

I evaluate the subsidized default insurance policy (implemented through the guarantee for Government-Sponsored Enterprises, GSEs) in the U.S. mortgage market both empirically and theoretically. Empirically, I find that the subsidy has raised mortgage interest rates for all loans strictly eligible for the subsidy (conforming loans), which is contrary to conventional wisdom. I do so by applying regression discontinuity designs and using the exogenous variation in mortgage rates generated by a mandate of U.S. Congress. My empirical strategy circumvents the endogeneity problem in conventional studies. Then I set up a screening model with asymmetric information, which explains my empirical results. Moreover, the model implies that the subsidy has hurt borrowers it was intended to help, even without considering the higher tax burden imposed on borrowers to finance the subsidy. The observed positive jumbo-conforming spread can also be explained by the model through incentive compatibility constraints associated with asymmetric information. My paper cautions regulators against interpreting the observed jumbo-conforming spread as an indication that the subsidy necessarily decreases mortgage rates and benefits conforming borrowers. Moreover, the paper shows that the subsidy raises household leverage, increases mortgage default rate, and ultimately undermines financial stability, calling for deeper housing finance reforms in the U.S. beyond the Dodd-Frank Act

Got Hurt for What You Paid? Revisiting Government Subsidy in the U.S. Mortgage Market

I evaluate the subsidized default insurance policy (implemented through the guarantee for Government-Sponsored Enterprises, GSEs) in the U.S. mortgage market both empirically and theoretically. Empirically, I find that the subsidy has raised mortgage interest rates for all loans strictly eligible for the subsidy (conforming loans), which is contrary to conventional wisdom. I do so by applying regression discontinuity designs and using the exogenous variation in mortgage rates generated by a mandate of U.S. Congress. My empirical strategy circumvents the endogeneity problem in conventional studies. Then I set up a screening model with asymmetric information, which explains my empirical results. Moreover, the model implies that the subsidy has hurt borrowers it was intended to help, even without considering the higher tax burden imposed on borrowers to finance the subsidy. The observed positive jumbo-conforming spread can also be explained by the model through incentive compatibility constraints associated with asymmetric information. My paper cautions regulators against interpreting the observed jumbo-conforming spread as an indication that the subsidy necessarily decreases mortgage rates and benefits conforming borrowers. Moreover, the paper shows that the subsidy raises household leverage, increases mortgage default rate, and ultimately undermines financial stability, calling for deeper housing finance reforms in the U.S. beyond the Dodd-Frank Act

Efficient Fully Convolution Neural Network for Generating Pixel Wise Robotic Grasps With High Resolution Images

This paper presents an efficient neural network model to generate robotic grasps with high resolution images. The proposed model uses fully convolution neural network to generate robotic grasps for each pixel using 400 $\times$ 400 high resolution RGB-D images. It first down-sample the images to get features and then up-sample those features to the original size of the input as well as combines local and global features from different feature maps. Compared to other regression or classification methods for detecting robotic grasps, our method looks more like the segmentation methods which solves the problem through pixel-wise ways. We use Cornell Grasp Dataset to train and evaluate the model and get high accuracy about 94.42% for image-wise and 91.02% for object-wise and fast prediction time about 8ms. We also demonstrate that without training on the multiple objects dataset, our model can directly output robotic grasps candidates for different objects because of the pixel wise implementation.Comment: Submitted to ROBIO 201

Enhanced Reversibility and Durability of a Solid Oxide Fe–Air Redox Battery by Carbothermic Reaction Derived Energy Storage Materials

The recently developed solid oxide metal–air redox battery is a new technology capable of high-rate chemistry. Here we report that the performance, reversibility and stability of a solid oxide iron–air redox battery can be significantly improved by nanostructuring energy storage materials from a carbothermic reaction

Spillover Effects of FDI in China: From the Perspective of Technology Gaps

On January 1, 2008, the Chinese government partly reduced the privileges enjoyed by FDI firms. This policy change again put the effects of FDI into public focus. Using Chinese industry-level panel data, this paper analyzes the spillover effects of FDI from the perspective of technology gaps (GAP). Unlike most previous studies that only analyze two or three levels of GAP, we instead treat it as a continuous explanatory variable. Also, we propose a more accurate measure for GAP. To overcome the difficulty of measuring spillover effects, we transform the spillover regression into the output regression. The method of DEA and a new set of instrumental variables are also employed to solve the problems of misspecification and endogeneity. We find that the spillover effects are negative and have a U-shaped relationship with GAP. These results are robust to various model specifications and estimation methods. We interpret our seemingly counter-intuitive findings as follows: the overall spillover effect can be divided into three components--the increasing "learning-room effect," the decreasing "learning-ability effect" and the "crowding-out effect," which is uncorrelated with GAP. Mainly because of the strict controls that FDI firms place on their core technologies, the "brain drain" from domestic firms to FDI firms, and the GDP-oriented behaviors of Chinese municipal officials, the negative "crowding-out effect" dominates the other two positive effects, and as GAP decreases from a small initial value, the increasing "learning-ability effect" dominates the decreasing "learning-room effect" (and vice versa). Consequently, a policy of reducing the privileges of FDI firms in industries with middle-sized technology gaps is suggested

Spillover Effects of FDI in China: From the Perspective of Technology Gaps

On January 1, 2008, the Chinese government partly reduced the privileges enjoyed by FDI firms. This policy change again put the effects of FDI into public focus. Using Chinese industry-level panel data, this paper analyzes the spillover effects of FDI from the perspective of technology gaps (GAP). Unlike most previous studies that only analyze two or three levels of GAP, we instead treat it as a continuous explanatory variable. Also, we propose a more accurate measure for GAP. To overcome the difficulty of measuring spillover effects, we transform the spillover regression into the output regression. The method of DEA and a new set of instrumental variables are also employed to solve the problems of misspecification and endogeneity. We find that the spillover effects are negative and have a U-shaped relationship with GAP. These results are robust to various model specifications and estimation methods. We interpret our seemingly counter-intuitive findings as follows: the overall spillover effect can be divided into three components--the increasing "learning-room effect," the decreasing "learning-ability effect" and the "crowding-out effect," which is uncorrelated with GAP. Mainly because of the strict controls that FDI firms place on their core technologies, the "brain drain" from domestic firms to FDI firms, and the GDP-oriented behaviors of Chinese municipal officials, the negative "crowding-out effect" dominates the other two positive effects, and as GAP decreases from a small initial value, the increasing "learning-ability effect" dominates the decreasing "learning-room effect" (and vice versa). Consequently, a policy of reducing the privileges of FDI firms in industries with middle-sized technology gaps is suggested

Cyclic Durability of a Solid Oxide Fe-Air Redox Battery Operated at 650°C

The recently developed rechargeable solid oxide metal-air redox battery has shown a great potential for applications in mid- to large-scale stationary energy storage. Cyclic durability is one of the most important requirements for stationary energy storage. In this study, we report the cyclic durability of a solid oxide Fe-air redox battery operated at 650°C. The battery was continuously cycled 100 times under a current density of 50 mA/cm2 with rather flat performance, producing an average specific energy of 760 Wh/kg-Fe at a round-trip efficiency of 55.5%. The post-test examination indicated that the performance losses could arise from the fuel-electrode of the battery

Cyclic Durability of a Solid Oxide Fe-Air Redox Battery Operated at 650°C

The recently developed rechargeable solid oxide metal-air redox battery has shown a great potential for applications in mid- to large-scale stationary energy storage. Cyclic durability is one of the most important requirements for stationary energy storage. In this study, we report the cyclic durability of a solid oxide Fe-air redox battery operated at 650◦C. The battery was continuously cycled 100 times under a current density of 50 mA/cm2 with rather flat performance, producing an average specific energy of 760 Wh/kg-Fe at a round-trip efficiency of 55.5%. The post-test examination indicated that the performance losses could arise from the fuel-electrode of the battery

A New Solid Oxide Molybdenum–Air Redox Battery

A new type of rechargeable molybdenum–air battery based on the technologies of reversible solid oxide fuel cells and chemical looping is reported in this study. The reversible solid oxide fuel cell serves as the electrical unit to realize the charging and discharging cycles while a pair of Mo/MoO2 redox couple integrated with the reversible solid oxide fuel cell stores electrical energy via an H2–H2O oxygen shuttle. The specific charge of the new battery reaches 1117 A h per kg-Mo at 550°C, which is 45% higher than the non-rechargeable Mo–air battery. The corresponding discharge specific energy is 974 W h per kg-Mo with a round trip efficiency of 61.7%. In addition, the new Mo–air redox battery also exhibits 13.9% and 24.5% higher charge density (A h L1 ) and energy density (W h L1 ) than the state-of-the-art solid oxide Fe-air redox battery, respectively