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Ten myths about subprime mortgages


  • Yuliya Demyanyk


On close inspection many of the most popular explanations for the subprime crisis turn out to be myths. Empirical research shows that the causes of the subprime mortgage crisis and its magnitude were more complicated than mortgage interest rate resets, declining underwriting standards, or declining home values. Nor were its causes unlike other crises of the past. The subprime crisis was building for years before showing any signs and was fed by lending, securitization, leveraging, and housing booms.

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  • Yuliya Demyanyk, 2009. "Ten myths about subprime mortgages," Economic Commentary, Federal Reserve Bank of Cleveland, issue May.
  • Handle: RePEc:fip:fedcec:y:2009:i:may

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    1. Caroline M. Hoxby, 2002. "School Choice and School Productivity (or Could School Choice be a Tide that Lifts All Boats?)," NBER Working Papers 8873, National Bureau of Economic Research, Inc.
    2. Hanushek, Eric A. & Kain, John F. & Rivkin, Steven G. & Branch, Gregory F., 2007. "Charter school quality and parental decision making with school choice," Journal of Public Economics, Elsevier, vol. 91(5-6), pages 823-848, June.
    3. Caroline Minter Hoxby, 2003. "School Choice and School Productivity. Could School Choice Be a Tide that Lifts All Boats?," NBER Chapters,in: The Economics of School Choice, pages 287-342 National Bureau of Economic Research, Inc.
    4. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416-416.
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