The OMDS/VGSE Vienna Joint Economics seminar is held weekly on Thursdays during the term.
VJE-Seminars scheduled in May:
- Speaker: Sarah Auster (U. Bonn)
- Title: Simultaneous Search and Adverse Selection
- Time: Thursday, May 16, 1:15 – 2:45 pm
- Location: Lecture Hall 12, OMP-1
- Abstract: We study the effect of diminishing search frictions in markets with adverse selection by presenting a model in which agents with private information can simultaneously contact multiple trading partners. We highlight a new trade-off: facilitating contacts reduces coordination frictions but also the ability to screen agents’ types. We find that, when agents can contact sufficiently many trading partners, fully separating equilibria obtain only if adverse selection is sufficiently severe. When this condition fails, equilibria feature partial pooling and multiple equilibria co-exist. In the limit, as the number of contacts becomes large, some of the equilibria converge to the competitive outcomes of Akerlof (1970), including Pareto dominated ones; other pooling equilibria continue to feature frictional trade in the limit, where entry is inefficiently high. Our findings provide a basis to assess the effects of recent technological innovations which have made meetings easier.
- Speaker: Gonzalo Paz-Pardo (ECB)
- Title: The Aggregate and Distributional Implications of Credit Shocks on Housing and Rental Markets (joint with Juan Castellanos and Andrew Hannon)
- Time: Thursday, May 23, 1:15 – 2:45 pm
- Location: Lecture Hall 12, OMP-1
- Abstract: We build a joint model of the aggregate housing and rental markets in which both house prices and rents are determined endogenously. Households can choose their housing tenure status (renters, homeowners, or landlords) and the size of their homes depending on their age, income and wealth. We use our model to study the impact of changes in credit conditions on house prices, rents and household welfare. First, we analyze the introduction in Ireland in 2015 of macro-prudential policies that limited loan-to-value (LTV) and loan-to-income (LTI) ratios of newly originated mortgages, and find that they mitigate house price growth, but increase rents and reduce homeownership rates. Young and middle-income households are negatively affected by the reform. Second, we study the impact of an unexpected permanent rise in real interest rates, and also find that it decreases house prices, increases rents and reduces homeownership.
