Researchers studying the effect of liquidity on borrowers during the Great Recession win 2021 TIAA Paul A. Samuelson Award

NEW YORK (January 7, 2022) – The TIAA Institute awarded Dr. Pascal Noel of
The University of Chicago Booth School of Business and Dr. Peter Ganong of
The University of Chicago Harris School of Public Policy the 26th annual TIAA
Paul A. Samuelson Award for Outstanding Scholarly Writing on Lifelong
Financial Security. The Samuelson Award recognizes outstanding research that
can enhance Americans’ financial well-being.

Record foreclosure rates and reduced aggregate demand during the Great
Recession sparked a vigorous policy debate about decreasing defaults and
increasing the consumption of struggling borrowers. The award-winning report,
“Liquidity Versus Wealth in Household Debt Obligations: Evidence from Housing
Policy in the Great Recession,” finds liquidity drives borrowers’ default and
consumption decisions, which suggests that distressed debt restructurings can
be redesigned with substantial gains to borrowers, lenders and taxpayers.

“This research has the potential to change how we look at borrowing and
consumption during major economic downturns,” said David P. Richardson,
head of the TIAA Institute. “The authors not only outline the important role of
liquidity but also suggest truly impactful solutions.”

“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. Pascal Noel. “By making temporary payment
reduction broadly accessible during the Covid-19 pandemic, policymakers
prevented a similar wave of foreclosures,” added Dr. Peter Ganong.

According to Stephen P. 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.”

Learn more about the TIAA Paul A. Samuelson Award here.

Press contact: TIAA Media Team, 888-200-4062,

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