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Housing markets and the financial crisis of 2007-2009: lessons for the future

Duca, John V., Muellbauer, John and Murphy, Anthony (2010) Housing markets and the financial crisis of 2007-2009: lessons for the future. SERC Discussion Papers (SERCDP0049). Spatial Economics Research Centre (SERC), London School of Economics and Political Sciences, London, UK.

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An unsustainable weakening of credit standards induced a US mortgage and housing bubble whose consumption impact was amplified by innovations altering the collateral role of housing. In countries with more stable credit standards, any overshooting of construction and house prices owed more to traditional housing supply and demand factors. Housing collateral effects on consumption varied, depending on the liquidity of housing wealth. Lessons include recognizing the importance of financial innovation, regulation, housing policies, and global financial imbalances for fueling credit, construction, house price and consumption cycles that vary across countries.

Item Type: Monograph (Working Paper)
Official URL:
Additional Information: © 2010 John V. Duca, John Muellbauer and Anthony Murphy
Divisions: Spatial Economics Research Centre
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HG Finance
JEL classification: O - Economic Development, Technological Change, and Growth > O1 - Economic Development
Date Deposited: 28 Mar 2011 10:50
Last Modified: 15 Jun 2024 07:21

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