Mortgages are long-term loans with nominal payments. Consequently, under incomplete asset markets, monetary policy can affect housing investment and the economy through the cost of new mortgage borrow
We examine what is widely considered to be one of the strongest channels of monetary policy transmission into household spending the effect of changes in mortgage payments when mortgage rates are lin
How much ability does the Fed have to stimulate the economy by cutting interest rates? We argue that the presence of substantial debt in fixed-rate, prepayable mortgages means that the ability to stim