Costs of housing crises: International evidence

Christian Aßmann, Jens Boysen-Hogrefe and Nils Jannsen

No 1524, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: This analysis provides evidence for the costs housing crises induce in terms of GDP growth and under what circumstances these crises are particularly costly. Housing crises are often followed by recessions that are longer and deeper than other recessions. According to empirical estimates, a housing crisis reduces the GDP growth rate in the following year on average by 2.5 percentage points and has a further negative impact in the second year. One important channel transmitting the additional effect of housing crises works through the depression of the construction sector, while wealth effects play a minor role.

Keywords: Housing crisis; Panel Data (search for similar items in EconPapers)
JEL-codes: C23 E21 E32 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: COSTS OF HOUSING CRISES: INTERNATIONAL EVIDENCE (2013)
Working Paper: Costs of housing crises: International evidence (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:1524

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