1 option
Why Did So Many People Make So Many Ex Post Bad Decisions? The Causes of the Foreclosure Crisis / Christopher L. Foote, Kristopher S. Gerardi, Paul S. Willen.
- Format:
- Book
- Author/Creator:
- Foote, Christopher L.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w18082.
- NBER working paper series no. w18082
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2012.
- Summary:
- We present 12 facts about the mortgage crisis. We argue that the facts refute the popular story that the crisis resulted from finance industry insiders deceiving uninformed mortgage borrowers and investors. Instead, we argue that borrowers and investors made decisions that were rational and logical given their ex post overly optimistic beliefs about house prices. We then show that neither institutional features of the mortgage market nor financial innovations are any more likely to explain those distorted beliefs than they are to explain the Dutch tulip bubble 400 years ago. Economists should acknowledge the limits of our understanding of asset price bubbles and design policies accordingly.
- Notes:
- Print version record
- May 2012.
The Penn Libraries is committed to describing library materials using current, accurate, and responsible language. If you discover outdated or inaccurate language, please fill out this feedback form to report it and suggest alternative language.