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Andreas Fuster

Related publications (30)

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The Rescue of Fannie Mae and Freddie Mac

Andreas Fuster

The imposition of federal conservatorships on September 6, 2008, at the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation—commonly known as Fannie Mae and Freddie Mac—was one of the most dramatic events of the financial c ...

2015

Securitization and the Fixed-Rate Mortgage

Andreas Fuster

Fixed-rate mortgages (FRMs) dominate the U.S. mortgage market, with important consequences for monetary policy, household risk management, and financial stability. We show that the FRM market share is sharply lower when mortgages are difficult to securitiz ...

2015

The Endowment Effect

Andreas Fuster

The endowment effect is among the best known findings in behavioral economics and has been used as evidence for theories of reference-dependent preferences and loss aversion. However, a recent literature has questioned the robustness of the effect in the l ...

2014

The Rising Gap between Primary and Secondary Mortgage Rates

Andreas Fuster

While mortgage rates reached historic lows during 2012, the spread between primary and secondary rates rose to very high levels. This trend reflected a number of factors that potentially affected mortgage originator costs and profits and restrained the pas ...

2013

What Goes Up Must Come Down? Experimental Evidence on Intuitive Forecasting

Andreas Fuster

Do laboratory subjects correctly perceive the dynamics of a mean-reverting time series? In our experiment, subjects receive historical data and make forecasts at different horizons. The time series process that we use features short-run momentum and long-r ...

2013

Natural Expectations, Macroeconomic Dynamics, and Asset Pricing

Andreas Fuster

How does an economy behave if (1) fundamentals are truly hump-shaped, exhibiting momentum in the short run and partial mean reversion in the long run, and (2) agents do not know that fundamentals are hump-shaped and base their beliefs on parsimonious model ...

University of Chicago Press2012

Expectations as Endowments: Evidence on Reference-Dependent Preferences from Exchange and Valuation Experiments

Andreas Fuster

While evidence suggests that people evaluate outcomes with respect to reference points, little is known about what determines them. We conduct two experiments that show that reference points are determined, at least in part, by expectations. In an exchange ...

2011

Insuring Consumption Using Income-Linked Assets

Andreas Fuster

We evaluate financial assets with payoffs linked to individual labor income, as conceived by Shiller (2003) and others. Using a realistically calibrated life-cycle model, we find that such assets can generate nontrivial welfare benefits, depending on the p ...

2011

Another Hidden Cost of Incentives: The Detrimental Effect on Norm Enforcement

Andreas Fuster, Stephan Meier

Monetary incentives, such as subsidies or bonuses, are often considered as a way to foster contributions to public goods in society and firms. This paper investigates experimentally the effect of private contribution incentives in the presence of a norm en ...

2010

Natural Expectations and Macroeconomic Fluctuations

Andreas Fuster

A large body of empirical evidence suggests that beliefs systematically deviate from perfect rationality. Much of the evidence implies that economic agents tend to form forecasts that are excessively influenced by recent changes. We present a parsimonious ...

2010