The serious delinquency rate for prime mortgages, at between 3 percent and 4 percent, is much lower than for nonprime loans, but it has almost doubled over the past year. Foreclosures have also risen sharply. The available data suggest that lenders initiated 2-1/4 million foreclosures last year, more than double the number seen in 2006.
In terms of the proposal for an automatic fiscal-policy response to output gaps of a certain size, calculating the output gap constitutes a problem. Different institutions do not reach the same result, and major revisions take place.