CREDIT AVAILABILITY AND ECONOMIC DECISIONS: SOME EVIDENCE FROM THEE MORTGAGE AND HOUSING MARKETS.

The article examines the impact of credit availability on the U.S. housing market. In the U.S. and Western Europe policymakers have attempted to increase housing stocks by making mortgage credit more readily available to consumers. The author presents analysis demonstrating such policies have not been effective. Over the long term housing stocks and other assets have grown at roughly the same rate, and considerably below the rate of increase of mortgage credit. Neither subsidies to mortgage borrowers nor greater availability of mortgage loans appear to have an impact on the distribution of real assets.