Baiyou Chen
I am a PhD candidate in the Department of Economics at Queen's University. My research interests are Macroeconomics. My current research focuses on the housing market and mortgage default. Â
Email: baiyou.chen@queensu.ca
Research:
Mortgage Choice, Default Risk and Monetary Policy(JMP)
We study the effect of interest rates on households mortgage decisions, respectively, with fixed-rate and adjustable-rate mortgages. Our model evaluates the response in a dynamic model of housing search and defaultable long-term mortgages. In the model, the sellers outstanding debt raises the selling price and time-to-sell, forming a positive relationship between debt and default risk. Interest rate movements affect households indebtedness, house-selling decisions and default risk when in financial distress. Given the choice of mortgage types, households respond to house prices upon various interest shocks. We find the default rate last longer among those with adjustable-rate mortgages with a rise in the interest rates.
PhD References:
Professor Amy Hongfei Sun
Professor Allen Head
Professor Huw Lloyd-Ellis