Calendrier du 22 novembre 2016
PSI-PSE (Petit Séminaire Informel de la Paris School of Economics) Seminar
Du 22/11/2016 de 17:00 à 18:00
MORENO Heddie (PSE)
The effect of grandparents’ schooling on their children’s and grandchildren's schooling
Applied Economics Lunch Seminar
Du 22/11/2016 de 12:30 à 13:30
LABONNE Claire (ACPR-PSE)
Cheap Credit, Affordable Housing? Evidence from the French Interest-Free Loan Policy
écrit avec Cécile Welter-Nicol (INSEE)
We use an arguably exogenous shift in credit to assess how borrowers’ characteristics and house prices vary with credit conditions. We identify credit supply shifts using within ZIP-code variations in the Interest-Free Loan (IFL) policy in France between 2009 and 2011. We sample ZIP-codes in which the IFL policy is exogenous to both contemporaneous and expected house prices. IFL policy zoning and subsidy size reforms are not simultaneous which allows ruling out local demand-based reforms. These credit supply shocks alleviate loan-to-value conditions. This in turn reduces the difference between borrowers’ and average incomes. Credit supply shifts are also channelled into housing prices. We find a high short-term elasticity of housing prices to credit (close to 0.7).