Discussion

摘要

Robert Hall opened the discussion by presenting evidence from Hall and Woodward (2012) supporting the hypothesis that the retail mortgage market in the United States features large markups. He used this evidence to question the authors' assumption that mortgage contracts in the United Kingdom are written in a completely competitive environment. Jonathan Parker pointed out that over the three different periods considered in the paper (1975 to 1985, 1986 to 1995, and 1996 to 2005), risk premia have declined in markets other than the mortgage market. Some of these markets, moreover, did not undergo the same institutional changes-such as increased competition and the growth of securitized lending-that the mortgage market experienced over the sample. He wondered whether the authors had any evidence to explain why these different markets exhibited such similar price behavior despite their structural differences. He also suggested supplementing figures 15 and 16 with information about loan sizes to document how that variable has changed across different sample periods.