The RFBerlin Brown Bag Seminar is an informal lunchtime meet up where researchers and students present ongoing work and new ideas in a relaxed, discussion-oriented setting. Rooted in the tradition of bringing one’s own lunch in a paper-brown bag, it offers space for open exchange and constructive feedback.

This week, we welcome David Berger, a professor of economics at Duke University and a research associate at the NBER.
An empirical macroeconomist, his work spans macro and monetary economics, housing, labour, and finance, from labour market power and monopsony to the way monetary policy travels through mortgage markets.

Event Topic:

A Danish Fix of U.S. Mortgage Lock-in?

(joint with Jaehun Jeong, Julie Marx, Maria Olesen and Fabrice Tourre)

We study Danish fixed-rate mortgage contracts, which are similar to those in the United States except that borrowers may repurchase their mortgages at market value. Using Danish administrative data, we show that households buy back debt when mortgage prices fall below par and that household mobility is largely insensitive when existing mortgage rates are below prevailing market rates – unlike in the United States, where mobility falls sharply as rates rise. We develop an equilibrium model explaining these patterns and show that introducing a repurchase-at-market option into U.S. mortgages substantially reduces interest-rate-induced lock-in with limited effects on equilibrium mortgage rates.

Event Details:

Participation in the seminar is limited to RFBerlin members and researchers from affiliated institutions. External researchers who are interested in attending are kindly asked to contact us under [email protected]