The political economy of the US mortgage default crisis

Atif Mian, Amir Sufi, Francesco Trebbi

Research output: Contribution to journalArticlepeer-review

130 Scopus citations

Abstract

We examine the effects of constituents, special interests, and ideology on congressional voting on two of the most significant pieces of legislation in US economic history. Representatives whose constituents experience a sharp increase in mortgage defaults are more likely to support the Foreclosure Prevention Act, especially in competitive districts. Interestingly, representatives are more sensitive to defaults of their own-party constituents. Special interests in the form of higher campaign contributions from the financial industry increase the likelihood of supporting the Emergency Economic Stabilization Act. However, ideologically conservative representatives are less responsive to both constituent and special interests.

Original languageEnglish (US)
Pages (from-to)1967-1998
Number of pages32
JournalAmerican Economic Review
Volume100
Issue number5
DOIs
StatePublished - Dec 2010

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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