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Cited by 201Housing Market and EconomicsBanking stability, regulation, efficiencyFinancial Literacy, Pension, Retirement Analysis

The DOI matches its Crossref record; 1 of the 1 references it cites were found in a registry or an index.

Liquidity versus Wealth in Household Debt Obligations: Evidence from Housing Policy in the Great Recession

Ganong, Peter, Noel, Pascal·2020·American Economic Review
DOI 10.1257/aer.20181243
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Abstract

We exploit variation in mortgage modifications to disentangle the impact of reducing long-term obligations with no change in short-term payments (“wealth”), and reducing short-term payments with no change in long-term obligations (“liquidity”). Using regression discontinuity and difference-in-differences research designs with administrative data measuring default and consumption, we find that principal reductions that increase wealth without affecting liquidity have no effect, while maturity extensions that increase only liquidity have large effects. This suggests that liquidity drives default and consumption decisions for borrowers in our sample and that distressed debt restructurings can be redesigned with substantial gains to borrowers, lenders, and taxpayers. (JEL E21, G21, G51, R38)

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Crossref · 10.1257/aer.20181243

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Metadata

Authors
Ganong, P., & Noel, P.
Affiliations
University of Chicago (US)
ORCID
Ganong, Peter
Venue
American Economic Review
Publisher
American Economic Association
Published
2020-10-01
Volume
110
Issue
10
Pages
3100-3138
ISSN
0002-8282 (ISSN-L)
DOI
10.1257/aer.20181243
OpenAlex
W2889419114
Cited by
201
References
1
Citations by year
2026: 18 · 2025: 41 · 2024: 39 · 2023: 26 · 2022: 22 · 2021: 33 · 2020: 13
FWCI
20.04
Type
journal article
Language
en
Open access
closed
Locations
  • American Economic Review (publishedVersion)
  • RePEc: Research Papers in Economics (submittedVersion)
Topics
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Housing Market and Economics
  • Social Sciences › Economics, Econometrics and Finance › Finance › Banking stability, regulation, efficiency
  • Social Sciences › Economics, Econometrics and Finance › Finance › Financial Literacy, Pension, Retirement Analysis
Keywords
household debt, mortgage modification, liquidity, household wealth, mortgage default, debt restructuring, housing policy, Great Recession, household consumption

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