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Mortgage down-payment and welfare in a life-cycle model

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  • Michał Rubaszek

    () (National Bank of Poland, Economic Institute)

Abstract

The paper presents a standard incomplete markets life-cycle model with housing that is calibrated to the Polish economy. The model is used to analyze the effects of changes in the minimum down-payment restriction on welfare. Our analysis shows that tougher credit conditions have a significant impact on the level of household debt, the ownership ratio and the time of first house purchase. However, assuming well functioning rental market the welfare costs are not sizable.

Suggested Citation

  • Michał Rubaszek, 2012. "Mortgage down-payment and welfare in a life-cycle model," Bank i Kredyt, Narodowy Bank Polski, vol. 43(4), pages 5-28.
  • Handle: RePEc:nbp:nbpbik:v:43:y:2012:i:4:p:5-28
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    File URL: http://www.bankikredyt.nbp.pl/content/2012/04/bik_04_2012_01_art.pdf
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    Citations

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    Cited by:

    1. Michal Rubaszek & Dobromil Serwa, 2011. "Determinants of credit to households in a life-cycle model," NBP Working Papers 92, Narodowy Bank Polski, Economic Research Department.
    2. Hanna Augustyniak & Jacek Łaszek & Krzysztof Olszewski & Joanna Waszczuk, 2013. "Housing market cycles – a disequilibrium model and its application to the primary housing market in Warsaw," Chapters from NBP Conference Publications, Narodowy Bank Polski, Economic Research Department.
    3. Michal Rubaszek, 2017. "Reforming housing rental market in a life-cycle model," Working Papers 2017-028, Warsaw School of Economics, Collegium of Economic Analysis.
    4. repec:nbp:nbpbik:v:48:y:2017:i:2:p:197-234 is not listed on IDEAS
    5. Arkadiusz Florczak & Janusz Jabłonowski, 2016. "Consumption over the life cycle in Poland," NBP Working Papers 252, Narodowy Bank Polski, Economic Research Department.
    6. Rubaszek, Michał & Serwa, Dobromił, 2014. "Determinants of credit to households: An approach using the life-cycle model," Economic Systems, Elsevier, vol. 38(4), pages 572-587.

    More about this item

    Keywords

    life-cycle model; housing; mortgage down-payment; welfare;

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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