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We published our post over at WaPo’s WonkBlog today — one of our favorite sites. Here is the link
As a quick follow up, here is a quote from a research paper by Richard Disney and others:
“However, we do find a strong asymmetry in the response for households in “negative equity”—households in negative equity experiencing a surprise gain (through generating additional income, for example) exhibit a consumption response five times stronger than households that had initially positive equity values in their housing stock.”
Again, the MPC estimate that Geithner uses is absurdly small, outside of the range that most economists use.