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A Disequilibrium Model of Savings and Loan Associations
Author(s) -
SMITH GARY,
BRAINARD WILLIAM
Publication year - 1982
Publication title -
the journal of finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 18.151
H-Index - 299
eISSN - 1540-6261
pISSN - 0022-1082
DOI - 10.1111/j.1540-6261.1982.tb03618.x
Subject(s) - disequilibrium , notional amount , economics , rationing , loan , asset (computer security) , estimation , monetary economics , econometrics , finance , medicine , health care , computer security , management , computer science , ophthalmology , economic growth
This paper discusses the consistent specification and estimation of asset demand equations in a disequilibrium model of financial markets. We estimate the effective asset demands of savings and loan associations, allowing for rationing in the mortgage market. These disequilibrium estimates are not very different from the estimates of notional demands with no rationing assumed. Savings and loans seem to be least affected by excess demand situations in that they are apparently not reluctant to raise mortgage rates and/or to ration borrowers.