Prof Rohan Pitchford and Prof Rabee Tourky

Three key markets (among others) were involved in the gestation of the worst financial crisis seen since the great depression: The market for mortgages; the market for securities backed by mortgages, and housing market. The aim is to develop a market equilibrium model that combines each of these sectors. The focus of this modeling exercise is the interaction between these markets, in particular, to examine aspects which may cause financial fragility. The project will derive policy solutions that address issues of stability and financial fragility that arise in these models in general, and more specifically to the Australian situation.