Prof. Alessandro Gavazza of London School of Economics on mortgages, cars and market friction
Scientific Sense ®
00:00
Refinancing Cross Subsidization in the Mortgage Market
Sandro: inactive households can implicitly cross subsidize active households who promptly respond to financial incentives. He says the idea is that you are a lot more financially savvy than I am, whereas I'm a slower financer. Sandro: The fact that there are these sluggish refinance in the market allows lender to offer discounts on prompt refinancing. Is there any policy implications here on Samuel?
Transcript
Play full episode
