The Resource Three essays on reputation, household debt, and monetary policy, Clodomiro F. Ferreira Mayorga

Three essays on reputation, household debt, and monetary policy, Clodomiro F. Ferreira Mayorga

Label
Three essays on reputation, household debt, and monetary policy
Title
Three essays on reputation, household debt, and monetary policy
Statement of responsibility
Clodomiro F. Ferreira Mayorga
Creator
Contributor
Subject
Language
eng
Summary
This dissertation is composed of three separate and self-contained chapters on two different areas: (i) reputation building and competition in on-line markets, and (ii) the heterogeneous transmission of monetary policy to household consumption expenditures and income. The first chapter investigates how sellers' strategic competition for high valuation buyers shapes reputation building incentives in a setting resembling an on-line market, and how it determines the dynamics of prices and reputation itself. Sellers repeatedly auction off a good to a pool of short-lived buyers; efforts and valuations are private information. Ceteris paribus, as the reputation of competitors increase (intensity of competition), a seller's incentive to exert effort that helps to successfully complete a transaction decrease. This "intensity" of competition effect, however, quickly disappears as the number of buyers in the market increases, providing a motivation for the use of equilibrium concepts such as "oblivious equilibrium", in which the only payoff relevant reputation is the average one. The second chapter shifts focus to household expenditure, debt and monetary policy. It is shown that, in response to an interest rate change, mortgagors (i.e. households that own a house with a mortgage) in the U.K. and U.S. adjust their spending significantly (especially on durable goods) but outright home-owners (i.e. households that own a house outright) do not. While the dollar change in mortgage payments is nearly three times larger in the U.K. than in the U.S., these magnitudes are much smaller than the overall change in expenditure. In contrast, the income change is sizable and similar across both household groups and countries. Consistent with the predictions of a simple heterogeneous agents model with credit-constrained households and multi-period fixed-rate debt contracts, our evidence suggests that the general equilibrium effect of monetary policy on income is quantitatively more important than the direct effect on cash-flows. Finally, the third chapter exploits individual mortgage data in the UK to try to further understand the role of mortgagor's balance sheets in the transmission of monetary policy. Estimation results point in the direction of significant heterogeneity in two dimensions: (i) in the response of observed leverage (loan-to-value) and affordability (loan-to-income) ratios at the time of origination for the median mortgagor, and (ii) the response of LTVs for households that are first-time-buyers and those that are non-first-time-buyers
Cataloging source
FIE
http://library.link/vocab/creatorName
Ferreira Mayorga, Clodomiro F
Date time place
Defence date: 3 May 2016
Dewey number
332.743
Dissertation note
Thesis (Ph. D.)--European University Institute (ECO), 2016.
Index
no index present
Literary form
non fiction
Nature of contents
theses
http://library.link/vocab/relatedWorkOrContributorName
European University Institute
Series statement
  • EUI PhD theses.
  • EUI theses
http://library.link/vocab/subjectName
  • Monetary policy
  • Consumer credit
  • Finance, Personal
Label
Three essays on reputation, household debt, and monetary policy, Clodomiro F. Ferreira Mayorga
Link
http://hdl.handle.net/1814/41347
Instantiates
Publication
Note
Examining Board: Professor Russell Cooper, Penn State University, Supervisor; Professor Piero Gottardi, EUI; Profesor Stefano Corradin, ECB; Professor Tony Yates, University of Birmingham
Bibliography note
Includes bibliographical references (p. 185-189)
Control code
FIEb17838897
Dimensions
30 cm.
Extent
xii, 189 pages
Other physical details
illustrations
System control number
(OCoLC)1088470607
Label
Three essays on reputation, household debt, and monetary policy, Clodomiro F. Ferreira Mayorga
Link
http://hdl.handle.net/1814/41347
Publication
Note
Examining Board: Professor Russell Cooper, Penn State University, Supervisor; Professor Piero Gottardi, EUI; Profesor Stefano Corradin, ECB; Professor Tony Yates, University of Birmingham
Bibliography note
Includes bibliographical references (p. 185-189)
Control code
FIEb17838897
Dimensions
30 cm.
Extent
xii, 189 pages
Other physical details
illustrations
System control number
(OCoLC)1088470607

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