The heterogeneous impact of labor market shifts on household mortgage-taking

09/15/2025 European Central Bank Central banks

This paper examines how structural change in labor markets affects household credit outcomes. Using a Shift-Share instrumental variable approach, we find that occupational shifts negatively influence mortgage holding for households facing fa-vorable job market conditions, such as stable employment and income growth. Our results, robust to alternative specifications, suggest that when both individual and economy-wide career prospects are favorable, the opportunity costs of settling down grow accordingly.

The causal effect of inflation on financial stability, evidence from history

09/12/2025 European Central Bank Central banks

In contrast to the conventional Fisherian view that inflation reduces real debt positions, we show that significant increases in inflation are strongly associated with financial crises. In the spirit of Jordà et al. (2020), countries with free and fixed ex-change rates can be compared to difference out the confounding reaction of monetary policy. Across a dataset of 18 advanced economies over 151 years, we show that the impact of inflation extends beyond its indirect effect via monetary policy.

Study Finds Male and Female Economists See the Economy Differently -- Even When Politically Aligned. It Matters for Everyone.

09/10/2025 Ineteconomics Analysis

In a significant new study published by the Institute for New Economic Thinking, Canadian economist Mohsen Javdani reveals that gender shapes views on power, equality, and inclusion in ways politics alone can’t explain.
Men and women might check the same box on election day, but they see the economy through different lenses. Just ask professional economists.

FEDS Paper: Pricing Tail Risks: Bank Equity Returns During the 2023 Bank Stress

09/05/2025 Federal Reserve Central banks

Matthew P. Seay and Shawn M. KimbleDid bank equity prices reflect growing sector imbalances before the 2023 failure of Silicon Valley Bank? We find that banks with higher reliance on uninsured deposits, or with higher marked-to-market leverage, had lower equity returns prior to SVB's collapse. Although markets priced uninsured deposits and high leverage individually, their interaction was not reflected in market prices prior to SVB’s failure.

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