DISCUSSION: RICHARD V. EASTIN.

The underlying premise of the Tucker paper is that institutional arrangements must be made, primarily in the form of regulatory changes, such that thrift institutions can be protected from the vagaries of fluctuating interest rates. This view ignores the more fundamental issue of whether it might be desirable to allow the housing sector to continue to play its role as handmaiden to monetary policy by contracting when monetary conditions are tight and expanding when conditions ease. On this issue Gibson (1) has presented rather convincing argument against buffering the housing sector at all. A stronger case should be made for the opposing view, which seems to limit its analysis to the microeconomics of thrift institutions rather than the macroeconomics of the effectiveness of monetary policy. However, the author avoids the issue and chooses to investigate ways in which the maturity differential can be reduced. [ABSTRACT FROM AUTHOR]