Pomona College and Yale University. The research described in this paper was supported by a grant from the National Science Foundation. Dwight M. Jaffee and Stuart I. Greenbaum provided very detailed and helpful suggestions.
A Disequilibrium Model of Savings and Loan Associations
Article first published online: 30 APR 2012
1982 The American Finance Association
The Journal of Finance
Volume 37, Issue 5, pages 1277–1293, December 1982
How to Cite
SMITH, G. and BRAINARD, W. (1982), A Disequilibrium Model of Savings and Loan Associations. The Journal of Finance, 37: 1277–1293. doi: 10.1111/j.1540-6261.1982.tb03618.x
- Issue published online: 30 APR 2012
- Article first published online: 30 APR 2012
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.