IE Repository
IE University Institutional Open Repository
Welcome to IE University Repository, an open access platform that collects, manages, and preserves the academic and research output of our university. This Repository aims to enhance the visibility and impact of our research community while fulfilling open access mandates from funding agencies and institutional policies, such as Law 17/2022 on Science, Technology, and Innovation, in addition to the National Agency for Quality Assessment and Accreditation (ANECA) for accreditations and sexenios (recognition of six-year research period).
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Recent Submissions
Mortgage Supply and Housing Rents
(Oxford University Press, 2018-12) Gete, Pedro; Reher, Michael; Spanish Ministry of Economy and Competitiveness
We show that a contraction of mortgage supply after the Great Recession has increased housing rents. Our empirical strategy exploits heterogeneity in MSAs’ exposure to regulatory shocks experienced by lenders over the 2010–2014 period. Tighter lending standards have increased demand for rental housing, leading to higher rents, depressed homeownership rates and an increase in rental supply. Absent the credit supply contraction, annual rent growth would have been 2.1 percentage points lower over 2010–2014 in MSAs in which lending standards rose from their 2008 levels.
Received December 21, 2016; editorial decision October 24, 2017 by Editor Philip Strahan. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.
Using Soccer Games as an Instrument to Forecast the Spread of COVID-19 in Europe
(Elsevier, 2021-11) Gómez, Juan Pedro; Mironov, Maxim; Spanish Ministry of Economy and Competitiveness (MCIU); State Research Agency (AEI); d European Regional Development Fund (ERDF)
We provide strong empirical support for the contribution of soccer games held in Europe to the spread of the COVID-19 virus in March 2020. We analyze more than 1,000 games across 194 regions from 10 European countries. Daily cases of COVID-19 grow significantly faster in regions where at least one soccer game took place two weeks earlier, consistent with the existence of an incubation period. These results weaken as we include stadiums with smaller capacity. We discuss the relevance of these variables as instruments for the identification of the causal effect of COVID-19 on firms, the economy, and financial markets.
Credit Stimulus, Executive Ownership, and Firm Leverage
(INFORMS, 2021-12-14) Gete, Pedro; Chakraborti, Rajdeep; Dahiya Sandeep; Ge Lei; Ministerio de Ciencia, Innovación y Universidades (MCIU); Agencia Estatal de Investigación (AEI); European Regional Development Fund (ERDF)
We show that executive ownership is a significant driver of the demand for credit following credit expansion policies. Our focus on credit demand is in contrast to most studies that have focused on credit supply factors such as bank capital. Our identification exploits the large and unexpected Chinese credit expansion in 2008. This setting offers a unique advantage as in 2008 the Chinese government had almost complete control over the banking sector and it directed the banks to increase credit supply. Thus, in this setting, demand, rather than supply, largely drives the observed changes in firms’ borrowing. We provide extensive robustness tests to validate our results.
The economic effects of real estate investors
(Wiley, 2023-01-19) Gete, Pedro; Tsouderou, Athena; Ministerio de Ciencia, Innovación y Universidades (MCIN); Fondo Europeo de Desarrollo Regional (FEDER); Agencia Estatal de Investigación (AEI)
We show five new results about small- and medium-sized real estate investors (SMREI) who participate through legal entities in US housing markets. First, SMREI have the largest growth across all cities post Great Recession, in contrast to Wall Street Landlords who concentrate in superstar cities. Second, SMREI increase house price growth and price-to-income ratio, especially in the bottom price tier. Third, this effect is reversed as investors trigger a medium-run supply response. Fourth, in areas with a high supply elasticity, SMREI affect rents more than prices. Finally, SMREI change the composition of the housing stock in favor of multifamily units.
Climate risk in mortgage markets: Evidence from Hurricanes Harvey and Irma
(Wiley, 2024-02-27) Gete, Pedro; Tsouderou, Athena; Wachter, Susan M.; Ministerio de Ciencia e Innovación; Agencia Estatal de Investigación
Using the Credit Risk Transfers (CRTs) issued by Fannie Mae and Freddie Mac, we study how, absent government intervention, mortgage markets would price hurricane risk. Currently, such risk is priced equally across locations even if it is location-specific. We hand collect a novel and detailed database to exploit CRTs' heterogeneous exposure to Hurricanes Harvey and Irma. Using a diff-in-diff specification, we estimate the reaction of private investors to hurricane risk. We use the previous results to calibrate a model of mortgage lending. We simulate hurricane frequencies and mortgage default probabilities in each US county to derive the market price of mortgage credit risk, that is, the implied guarantee fees (g-fees). Market-implied g-fees in counties most exposed to hurricanes would be 70% higher than inland counties.