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Heterogeneity and Asymmetric Macroeconomic Effects of Changes in Loan-to-Value Limits
2019
Social Science Research Network
We estimate the macroeconomic e¤ects of changes in loan-to-value limits using an approach that involves the cross-sectional loan-to-value distribution and does not require that a limit is actually in place. We show that the e¤ects are asymmetric and non-linear as tighter limits constrain a larger fraction of borrowers. Symmetry is a good approximation when the limit is tight but not at other points. We ...nd that an increase in heterogeneity can substantially increase the e¤ects of a change in
doi:10.2139/ssrn.3388199
fatcat:3i5etaw7jvculnu43hkdbdpkcy