Economic models

• Adverse Selection with Heterogeneously Informed Agents

  Staff Working Paper 2018-7 Mohammad Davoodalhosseini

  A model of over-the-counter markets is proposed. Some asset buyers are informed in that they can identify high quality assets. Heterogeneous sellers with private information choose what type of buyers they want to trade with.

  Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Financial markets, Financial stability, Financial system regulation and policies, Market structure and pricing JEL Code(s): D, D4, D40, D8, D82, D83, G, G0, G01, G1, G10, G2, G20

• Home Equity Extraction and the Boom-Bust Cycle in Consumption and Residential Investment

  Staff Working Paper 2018-6 Xiaoqing Zhou

  The consumption boom-bust cycle in the 2000s coincided with large fluctuations in the volume of home equity borrowing. Contrary to conventional wisdom, I show that homeowners largely borrowed for residential investment and not consumption.

  Content Type(s): Staff research, Staff working papers Topic(s): Credit and credit aggregates, Economic models, Housing JEL Code(s): D, D1, E, E2, E3