Interest and non-interest terms in the process of mortgage market clearing
Item Type:Journal article
Citation:F.X. Browne, 'Interest and non-interest terms in the process of mortgage market clearing', Economic and Social Research Institute, Economic and Social Review, Vol.19, No. 2, January, 1988, 1988
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The paper is devoted to a test of the hypothesis of mortgage market disequilibrium in Ireland. The mortgage rate is found to be very sluggish upwards when excess demand prevails, lending support to the mortgage rationing theory. In an incipient excess supply regime the mortgage rate is lowered to the market-clearing level instantaneously. We also obtain evidence that the down-payment ratio is used by building societies as a sorting device. The role of this non-price term creates econometric difficulties in testing for disequilibrium. These difficulties are dealt with in a novel way.
Author: Browne, F.X.
Publisher:Economic and Social Research Institute
Type of material:Journal article
Series/Report no:Economic and Social Review
Vol.19, No. 2, January, 1988
Availability:Full text available