The Political Economy of the US Mortgage Default Crisis
Abstract
We examine the effects of constituents, special interests, and ideology on congressional voting on two of the most significant pieces of legislation in US economic history. Representatives whose constituents experience a sharp increase in mortgage defaults are more likely to support the Foreclosure Prevention Act, especially in competitive districts. Interestingly, representatives are more sensitive to defaults of their own-party constituents. Special interests in the form of higher campaign contributions from the financial industry increase the likelihood of supporting the Emergency Economic Stabilization Act. However, ideologically conservative representatives are less responsive to both constituent and special interests. (JEL D72, G21, G28)
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- Authors
- Mian, A., Sufi, A., & Trebbi, F.
- Affiliations
- University of California, Berkeley (US)
- University of Chicago (US)
- National Bureau of Economic Research (US)
- ORCID
- Trebbi, Francesco
- Venue
- American Economic Review
- Publisher
- American Economic Association
- Published
- 2010-12-01
- Volume
- 100
- Issue
- 5
- Pages
- 1967-1998
- ISSN
- 0002-8282 (ISSN-L)
- OpenAlex
- W1971534717
- Cited by
- 375
- References
- 62
- Citations by year
- 2026: 16 · 2025: 22 · 2024: 33 · 2023: 14 · 2022: 24 · 2021: 19 · 2020: 27 · 2019: 24 · 2018: 26 · 2017: 19 · 2016: 22 · 2015: 24 · 2014: 24 · 2013: 25 · 2012: 27
- FWCI
- 71.76
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- American Economic Review (publishedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Topics
- Social Sciences › Business, Management and Accounting › Strategy and Management › Political Influence and Corporate Strategies
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Housing Market and Economics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Fiscal Policies and Political Economy
- Keywords
- mortgage default, congressional voting, constituent influence, interest groups, campaign contributions, financial services, political ideology, partisanship, political responsiveness, 2008 financial crisis
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