An economics paper co-authored by a University of South Carolina Upstate faculty member has won attention in England, and could influence thinking about the effect of mortgage spreads on the economy.

Jack Cheng, an assistant professor of economics at the George Dean Johnson, Jr. College of Business and Economics, said “mortgage spread” refers to the difference between the mortgage interest rate and the interest rate for government treasury bonds.

The spread reflects “the risk premium and other factors that are related to the mortgage market,” Cheng explained.

Cheng and the Bank of England’s Ching-Wai “Jeremy” Chiu co-authored the Bank of England Staff Working Paper No. 634: Nonlinearities of Mortgage Spreads Over the Business Cycle, which was then featured in an article on the Central Banking website.

In their research, the authors demonstrated that unexpected changes in the mortgage spread have a greater effect on the economy during times of recession than during expansion.

“The paper has vital policy implications,” Cheng said. “It’s saying that by influencing mortgage spreads … the Mortgage Backed Security Purchase Program (implemented by the Federal Reserve in 2009) would likely have a greater impact on the economy when the economy is in a recession.”

According to the Federal Reserve Bank of New York’s website, the program “was intended to provide support to mortgage lending and housing markets and to foster improved conditions in financial markets more generally.”

With publication by Central Banking, Cheng said the research is being recognized for its importance.

“It means that the research is important, and I hope that the results from this study will provide important insights to policy makers and help them implement appropriate policies when dealing with future crises,” Cheng said.

Congratulations to 14 members of the USC Upstate faculty who have received RISE awards.

The RISE, or Research Initiative for Summer Engagement, program provides financial support to pay for summer salary, research supplies, travel related to research and undergraduate student support.

2017 USC Upstate RISE Recipients:

Recipient Name	Project Title
Jack Cheng	Nonlinearities of Mortgage Spreads over the Business Cycles
Michael Dinger	IT Role Embeddedness: Testing A Theory of IT Professional Behavior
Ann Hoover	The Role of Power in the Backlash Effect
Rebecca Mueller	Learning by Doing: The Impact of Question Development and Implementation on Teachers’ Understanding of Compelling Questions
Allison Pingley	Czeching out of Communism
Nolan Stolz	Recording Two Original Orchestral Compositions: “From The Hudson” and “Prairie View”
Matthew Placek	Online News and Citizen Support for Democracy in Central and Eastern Europe
Nicole Richardson	Through a Glass Darkly: Ye Shaoyuan’s Search for His Deceased Daughter in a Late Ming Séance
Kimberly Shorter	Effects of MTHFR Function on Epigenetics-Related Genes’ Expression in Folic Acid-Treated SH-SY5Y Cells
Ning Yu	Developing an Open Source Deep Learning Tool Based on a Novel Auto-Encoder Algorithm
Emily Kofoed	Silence at the North Pole: Russia’s Rhetorical Strategy for Arctic Sovereignty: An Analysis of International Political Discourse in an Information Age
Tina Herzberg	Case Studies of Established Print Readers Learning and Using Braille and Technology in School and Home
Calvin Odhiambo	Black-White Racial Disparity in Cardiovascular Disease Risk Among People with HIV-AIDS in America: A Systematic Review and Meta-Analysis
Felicia Jenkins	Physical Activity and Cardiometabolic Risk Factors in African American Women

To see a list of all 35 faculty members recognized in the USC system.