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)|
|Additional Information:||© 2010 John V. Duca, John Muellbauer and Anthony Murphy|
|Library of Congress subject classification:||H Social Sciences > HC Economic History and Conditions
H Social Sciences > HG Finance
|Journal of Economic Literature Classification System:||O - Economic Development, Technological Change, and Growth > O1 - Economic Development|
|Sets:||Research centres and groups > Spatial Economics Research Centre
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