The TIAA Paul A. Samuelson Award for outstanding scholarly writing on lifelong financial security

Pascal Noel, The University of Chicago Booth School of Business, and Peter Ganong, The University of Chicago Harris School of Public Policy, won the 2021 TIAA Paul A. Samuelson Award for Outstanding Scholarly Writing on Lifelong Financial Security for their paper “Liquidity versus Wealth in Household Debt Obligations: Evidence from Housing Policy in the Great Recession” published in American Economic Review 2020, 110(10): 3100–3138.

Record foreclosure rates and reduced aggregate demand during the Great Recession sparked a vigorous policy debate about how to decrease mortgage defaults and increase consumption of struggling borrowers. In their timely study, Drs. Noel and Ganong find liquidity has a significant effect on borrowers’ default and consumption decisions, which suggests that distressed debt restructurings can be redesigned with substantial gains to borrowers, lenders and taxpayers.

“Falling behind on mortgage payments during the Great Recession was devastating for many families, leading 1-in-13 owner-occupied homes to undergo foreclosure when all many needed to catch up was a temporary payment reduction.” said Dr. Noel. “By making temporary payment reduction broadly accessible during the Covid-19 pandemic, policymakers prevented a similar wave of foreclosures this time around,” added Dr. Ganong.

According to Stephen Zeldes, Benjamin M. Rosen Professor of Economics and Finance at Columbia University's Graduate School of Business and one of the Samuelson Award judges, “In this creative, beautifully-executed, and policy-relevant paper, the authors address an important and longstanding question in economics: how much does short-term liquidity influence consumer behavior? Using new comprehensive data, they come up with a clear answer: liquidity matters, both for consumer spending and mortgage default.”

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