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Crises in the Housing Market: Causes, Consequences, and Policy Lessons

Carlos Garriga () and Aaron Hedlund

No 2019-33, Working Papers from Federal Reserve Bank of St. Louis

Abstract: The global financial crisis of the past decade has shaken the research and policy worlds out of their belief that housing markets are mostly benign and immaterial for understanding economic cycles. Instead, a growing consensus recognizes the central role that housing plays in shaping economic activity, particularly during large boom and bust episodes. This article discusses the latest research regarding the causes, consequences, and policy implications of housing crises with a broad focus that includes empirical and structural analysis, insights from the 2000's experience in the United States, and perspectives from around the globe. Even with the significant degree of heterogeneity in legal environments, institutions, and economic fundamentals over time and across countries, several common themes emerge to guide current and future thinking in this area.

Keywords: housing; mortgages; debt; crisis; foreclosure (search for similar items in EconPapers)
JEL-codes: D31 D83 E21 E22 G11 G12 G21 (search for similar items in EconPapers)
Date: 2019-04-18
New Economics Papers: this item is included in nep-mac and nep-ure
Note: Published August 2019 in Oxford Research Encyclopedia, Economics and Finance (doi: 10.1093/acrefore/9780190625979.013.159).
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Handle: RePEc:fip:fedlwp:2019-033