IDEAS home Printed from https://ideas.repec.org/a/taf/macfem/v4y2011i1p1-8.html
   My bibliography  Save this article

Non-recourse mortgages and credit market breakdowns: a framework for policy analysis

Author

Listed:
  • Kaushik Basu

Abstract

This article illustrates that the legal structure of mortgage credit, in particular its status in terms of recourse in foreclosure, can lead not only to the familiar problem of adverse selection but multiple equilibria in the credit market with the possibility of a small exogenous shock leading to a major breakdown in the credit market with the supply of credit drying up. As such, it tries to shed light on the recent sub-prime crisis; and suggests lessons for emerging economies drafting regulation for modern financial markets so as to prevent meltdowns.

Suggested Citation

  • Kaushik Basu, 2011. "Non-recourse mortgages and credit market breakdowns: a framework for policy analysis," Macroeconomics and Finance in Emerging Market Economies, Taylor & Francis Journals, vol. 4(1), pages 1-8.
    • Handle: RePEc:taf:macfem:v:4:y:2011:i:1:p:1-8
    DOI: 10.1080/17520843.2010.529634
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/17520843.2010.529634
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/17520843.2010.529634?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Joseph Obaje Ataguba & Celestine Udoka Ugonabo, 2023. "Framework for measuring the efficiency and efficacy of sale of distressed mortgaged properties using imports of statistical tests deployed in clinical studies," SN Business & Economics, Springer, vol. 3(8), pages 1-32, August.
    2. Kaushik Basu, 2011. "A simple model of the financial crisis of 2007‐2009, with implications for the design of a stimulus package," Indian Growth and Development Review, Emerald Group Publishing Limited, vol. 4(1), pages 5-21, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:macfem:v:4:y:2011:i:1:p:1-8. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/REME20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.