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270
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Fields of Interest
PRIMARY: Public Economics, Macroeconomics, Applied Econometrics, Computational Economics
SECONDARY: Financial Economics, Real Estate
Teaching Experience at Boston University
Summer 2007: Instructor for EC102 Introductory Macroeconomics (Syllabus)
Fall 2005, Spring & Fall 2006, Spring 2007, Fall 2008: Teaching Fellow for EC102 Introductory Macroeconomics, Professor Mirco Soffritti
Spring & Fall, 2006 - 2007: Tutor for EC102 Introductory Macroeconomics
References
Laurence J. Kotlikoff, kotlikoff@bu.edu, (617)-353-4002, Boston University Department of Economics, 270 Bay State Road, Boston, MA 02215
Kenneth L. Judd, judd@hoover.stanford.edu, (650)-723-5866, Hoover Institution, Stanford, CA 94305
Marc Rysman, mrysman@bu.edu, (617)-353-3086, Boston University Department of Economics, 270 Bay State Road, Boston, MA 02215
Conferences and seminars
Invited Talks January-February 2009: Wharton IRM, Congressional Budget Office, Federal Reserve Board, HEC Montreal, Universite de Montreal Department of Economics, Tilburg University, Universitat Autonoma de Barcelona, University of Alberta, Carleton University, Utah State University, NHH, European Business School, NYU Furman Center, Luiss Guido Carli
September 2008: Green Line Macro Meeting (GLMM), Boston
September 2008: Empirical Micro Lunch, Boston University
August 2008: Institute on Computational Economics, University of Chicago
June 2008: 14th International Conference on Computing in Economics and Finance, University of Sorbonne, Paris
April 2008: Macroeconomics Dissertation Workshop, Boston University
March 2007: Macroeconomics Dissertation Workshop, Boston University
Research
Does it Pay to Get a Reverse Mortgage? - Job Market Paper
Many of America's
elderly are considering reverse mortgages as a way to relieve their financial
pressures. These financial instruments let homeowners a) remain in their
homes for as long as possible and b) borrow against their home equity at
terms that include large up-front costs and high interest rates. Repayment
of this borrowing is triggered by moving, repaid out of house sale proceeds,
and capped by the value of those proceeds. Reverse mortgagees who borrow
sums that are large relative to their house values and remain in their homes
for extended periods of time win this gamble. They enjoy the use of their
homes and the borrowed money and simply hand over the keys when they exit
their homes, be it vertically or horizontally, for the last time. Reverse
mortgagees who borrow large sums and whose home exits occur early lose this
gamble. Thus, reverse mortgages constitute the purchase of a no-exit annuity
- an annuity that pays o¤ in the form of the housing services of
your current home provided you don't permanently exit your home. Since not
exiting is partly conditioned on not dying, the no-exit annuity encompasses
some longevity insurance. But it also introduces extra risk associated with
exiting the home prior to death. This paper uses single households from
the Health and Retirement Study (HRS) data to study the economic gains or
losses associated with taking out reverse mortgages. These data are examined
within a dynamic structural life-cycle model featuring consumption, housing,
and mobility decisions. These decisions are made in light of life span and
mobility uncertainty. We address the estimation difficulties by using a
set of tools from Applied Mathematics. We find that retirees are risk averse
and the home equity is the most important component of precautionary savings.
Moreover, reverse mortgages are a very bad option for house-rich, but cash-poor
households. For such households, taking out the standard reverse mortgage
and borrowing the maximum permitted amount reduces expected utility, on
average, to the same degree as a 120 percent loss in financial assets.
Ostensibly,
people marry for love. In fact money may be the driving factor.
Marriage engenders economizing of resources, pooling risks and sharing wealth.
How important are these factors? We provide an economic view of marriage
and we determine what it is worth. Specifically, this paper is concerned
with marriage as an implicit insurance contract against the risk of earning
loss, of disability and of running out of consumption resources because
of greater than average longevity. Our main finding is that, even though
economies of shared living are the dominant factor in the financial gain
from marriage, the risk-sharing opportunities provided by the family can
play an important role.
Does it Pay to Pay Off Your Mortgage?
Despite the fact that some elderly Americans have enough financial assets to pay off their mortgage, they choose to continue their scheduled mortgage payments until loan termination. While mortgage interest accumulates over time, it is a tax-deductible expense. We investigate whether groups of elderly Americans benefit from retaining a mortgage, distinguishing between the rich and the poor. This paper uses household data from the Health and Retirement Study (HRS) to examine the welfare gain from paying off the mortgage and the welfare loss experienced if the mortgage interest deduction were reduced. These data are examined within a dynamic life-cycle model that incorporates progressive taxation, pension and social security benefits. Consumption decisions are made in light of lifespan, medical expenses, interest rate and house price uncertainty.