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A Microeconomic Model of Federal Home Loan Mortgage Corporation Activity

A Microeconomic Model of Federal Home Loan Mortgage Corporation Activity A Microeconomic Model of Federal Home Loan Mortgage Corporation Activity KENNETH T. ROSEN and DAVID E. BLOOM* I. Introduction THEPURPOSE OF THE Federal Credit Agencies (FCA’s) is to help stabilize the residential construction sector of the U.S. economy.’ However, instability of residential construction seems to have worsened in recent years despite rapid l growth of the FCA’s, which have at times accounted for over one-third of a l Federal borrowing activity? This situation has generated substantial concern among public policymakers and academic researchers over the behavior of the FCA’s and over their effectiveness in meeting their public policy goals (see Goldfeld, Jaffee, and Quandt [2], Grebler [3], Hearings [5], Hendershott and Villani [6], Jaffee and Rosen [7], Kaufman [8],Rosen [lo], Rosen and Kearl [113, and Silber [121). However, there has not yet been any systematic attempt to evaluate the behavior and effectiveness of the most recently created and most rapidly growing of the FCA’s-the Federal Home Loan Mortgage Corporation (FHLMC). The objective of this paper is to provide a microeconomic analysis of the FHLMC. Section I1 presents a brief institutional background on the FHLMC. Section I11 sets out a demand-supply model of FHLMC mortgage purchase activities. Section IV http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Journal of Finance Wiley

A Microeconomic Model of Federal Home Loan Mortgage Corporation Activity

ROSEN, KENNETH T.; BLOOM, DAVID E.
The Journal of Finance , Volume 35 (4) – Sep 1, 1980
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References (5)

Publisher
Wiley
Copyright
1980 The American Finance Association
ISSN
0022-1082
eISSN
1540-6261
DOI
10.1111/j.1540-6261.1980.tb03513.x
Publisher site
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Abstract

A Microeconomic Model of Federal Home Loan Mortgage Corporation Activity KENNETH T. ROSEN and DAVID E. BLOOM* I. Introduction THEPURPOSE OF THE Federal Credit Agencies (FCA’s) is to help stabilize the residential construction sector of the U.S. economy.’ However, instability of residential construction seems to have worsened in recent years despite rapid l growth of the FCA’s, which have at times accounted for over one-third of a l Federal borrowing activity? This situation has generated substantial concern among public policymakers and academic researchers over the behavior of the FCA’s and over their effectiveness in meeting their public policy goals (see Goldfeld, Jaffee, and Quandt [2], Grebler [3], Hearings [5], Hendershott and Villani [6], Jaffee and Rosen [7], Kaufman [8],Rosen [lo], Rosen and Kearl [113, and Silber [121). However, there has not yet been any systematic attempt to evaluate the behavior and effectiveness of the most recently created and most rapidly growing of the FCA’s-the Federal Home Loan Mortgage Corporation (FHLMC). The objective of this paper is to provide a microeconomic analysis of the FHLMC. Section I1 presents a brief institutional background on the FHLMC. Section I11 sets out a demand-supply model of FHLMC mortgage purchase activities. Section IV

Journal

The Journal of Finance – Wiley

Published: Sep 1, 1980

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