US

Fannie and Freddie

Prior to the crisis, the benefits from the funding advantage that Fannie Mae and Freddie Mac had by virtue of perceived government support mostly went to their shareholders, rather than into substantially lower interest rates on residential mortgages.

Responses weighted by each expert's confidence

Participant University Vote Confidence Bio/Vote History
Acemoglu
Daron Acemoglu
MIT
Uncertain
4
Bio/Vote History
Difficult to know how gains from subsidies were distributed between shareholders and mortgage-holders pre-crisis given implicit risks.
Alesina
Alberto Alesina
Harvard
Agree
5
Bio/Vote History
Altonji
Joseph Altonji
Yale
Uncertain
1
Bio/Vote History
Auerbach
Alan Auerbach
Berkeley
No Opinion
Bio/Vote History
Autor
David Autor
MIT
No Opinion
Bio/Vote History
Baicker
Katherine Baicker
University of Chicago
No Opinion
Bio/Vote History
Bertrand
Marianne Bertrand
Chicago
No Opinion
Bio/Vote History
Chetty
Raj Chetty
Harvard
No Opinion
Bio/Vote History
Chevalier
Judith Chevalier
Yale
Disagree
5
Bio/Vote History
Lower rates were also a likely outcome.
Currie
Janet Currie
Princeton
Agree
6
Bio/Vote History
Cutler
David Cutler
Harvard
Uncertain
5
Bio/Vote History
Deaton
Angus Deaton
Princeton
Uncertain
1
Bio/Vote History
Duffie
Darrell Duffie
Stanford
Agree
8
Bio/Vote History
Hard to be certain. F and F used cheap funding to massively expand mortgage financing, so may also caused a large impact on mortgage rates.
Edlin
Aaron Edlin
Berkeley Did Not Answer Bio/Vote History
Eichengreen
Barry Eichengreen
Berkeley
Uncertain
5
Bio/Vote History
Fair
Ray Fair
Yale
Uncertain
5
Bio/Vote History
Goldberg
Pinelopi Goldberg
Yale
Disagree
3
Bio/Vote History
While shareholders certainly benefited, borrowers faced lower interest rates too.
Goldin
Claudia Goldin
Harvard
No Opinion
Bio/Vote History
Goolsbee
Austan Goolsbee
Chicago
Agree
8
Bio/Vote History
research shows only small % went to borrowers. But not all went to shareholders--can't forget the rent-seeking or the emp. compensation
Greenstone
Michael Greenstone
University of Chicago
Uncertain
6
Bio/Vote History
there is evidence of a small impact on interest rates on loans. i suspect that shareholders AND managers captured some of the rents.
Hall
Robert Hall
Stanford
Uncertain
10
Bio/Vote History
According to a leading expert, the estimates of the pass-through to borrowers vary between 1/3 and 2/3.
Holmström
Bengt Holmström
MIT
Uncertain
3
Bio/Vote History
The fact that investment firms held onto some loans, competing with Fannie and Freddie, suggests consumers didn't capture all of subsidy.
Hoxby
Caroline Hoxby
Stanford Did Not Answer Bio/Vote History
Judd
Kenneth Judd
Stanford
Disagree
6
Bio/Vote History
Kashyap
Anil Kashyap
Chicago Booth
Strongly Agree
9
Bio/Vote History
Well documented by Greenspan in 2004! Sadly the F & F losses was one part of the crisis that was foreseen and Congress refused to act.
-see background information here
Klenow
Pete Klenow
Stanford
Agree
3
Bio/Vote History
At least judging from mortgage rates in the U.S. vs. other OECD countries without GSEs.
-see background information here
Lazear
Edward Lazear
Stanford
Agree
8
Bio/Vote History
Private issuers could have achieved the same effect absent F/F's govt granted advantage. Shareholders' benefits were arbitraged away, though
Levin
Jonathan Levin
Stanford Did Not Answer Bio/Vote History
Maskin
Eric Maskin
Harvard
No Opinion
Bio/Vote History
I don't know enough about this issue to express a public opinion.
Nordhaus
William Nordhaus
Yale
No Opinion
Bio/Vote History
Obstfeld
Maurice Obstfeld
Berkeley
No Opinion
Bio/Vote History
Saez
Emmanuel Saez
Berkeley
Agree
3
Bio/Vote History
Scheinkman
José Scheinkman
Columbia University
Agree
6
Bio/Vote History
Schmalensee
Richard Schmalensee
MIT
Agree
3
Bio/Vote History
Shin
Hyun Song Shin
Princeton
Uncertain
8
Bio/Vote History
Stock
James Stock
Harvard Did Not Answer Bio/Vote History
Stokey
Nancy Stokey
University of Chicago
Agree
4
Bio/Vote History
Thaler
Richard Thaler
Chicago Booth
No Opinion
Bio/Vote History
Sounds reasonable but I don't know enough to have a real opinion.
Udry
Christopher Udry
Northwestern
Uncertain
1
Bio/Vote History
Zingales
Luigi Zingales
Chicago Booth Did Not Answer Bio/Vote History