Figure 10.2 shows the U.S. housing price index (solid line, left axis) and one year adjustable mortgage rates-a proxy for subprime loans (dashed line, right axis). In the context of the housing and financial crisis, discuss the relationship between these two series.
Figure 10.2: Housing prices and one-year adjustable mortgage rates
(Source: Federal Reserve Economic Data, St. Louis Federal Reserve)

Question

Figure 10.2 shows the U.S. housing price index (solid line, left axis) and one year adjustable mortgage rates-a proxy for subprime loans (dashed line, right axis). In the context of the housing and financial crisis, discuss the relationship between these two series.
Figure 10.2: Housing prices and one-year adjustable mortgage rates  
(Source: Federal Reserve Economic Data, St. Louis Federal Reserve)

Quizplus · Accepted Answer

The Answer of Figure 10.2 shows the U.S. housing price index (solid line, left axis) and one year adjustable mortgage rates-a proxy for subprime loans (dashed line, right axis). In the context of the housing and financial crisis, discuss the relationship between these two series.
Figure 10.2: Housing prices and one-year adjustable mortgage rates  
(Source: Federal Reserve Economic Data, St. Louis Federal Reserve)

Figure 102 Shows the U