Replication data for: Failure to Launch: Housing, Debt Overhang, and the Inflation Option

Aaron Hedlund
Can inflating away nominal mortgage liabilities effectively combat recessions? I address this question using a model of illiquid housing, endogenous credit supply, and equilibrium default. I show that, in an ordinary recession, temporarily raising the inflation target has only modest or even counterproductive effects. However, during episodes like the Great Recession, inflation effectively boosts house prices, consumption, and dramatically cuts foreclosures, but only when fixed-rate mortgages are the dominant instrument. The quantitative implications of inflation...
This data repository is not currently reporting usage information. For information on how your repository can submit usage information, please see our documentation.