National and International Business Cycle Effects of Housing Crises

Nils Jannsen

Kiel Working Papers from Kiel Institute for the World Economy

Abstract: Housing crises usually go hand in hand with a long lasting recession and a considerable loss in output. We first re-examine the effects of a housing crises on the business cycle based on historical crises. Then we estimate the international spill-over-effects if several huge industrial countries face a housing crisis simultaneously. While the economic impact of the housing crisis in the United States, from a historical perspective, should have bottomed out at the end of 2008 and the business cycle pattern differed significantly from that in a typical crisis, house prices in Great Britain, Spain and France just started to drop at the end of 2007. If we assume that a typical housing crisis occurs in all of these three countries, international transmission effects then would lead to significant losses of GDP growth in several other countries, notably in Europe

Keywords: Housing Crisis; Business Cycle; International Transmission; Global VAR (search for similar items in EconPapers)
JEL-codes: C50 E32 F42 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac and nep-ure
Date: 2009-04
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Journal Article: National and International Business Cycle Effects of Housing Crises (2010)
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Persistent link: http://EconPapers.repec.org/RePEc:kie:kieliw:1510

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