Costs of housing crises: International evidence

Christian Aßmann, Jens Boysen-Hogrefe and Nils Jannsen

No 1524 [rev.], Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: This paper analyzes the costs of housing crises in terms of GDP growth and the economic conditions under which crises are particularly costly. Housing crises are often followed by recessions that are longer than other recessions. According to empirical estimates, a housing crisis reduces the GDP growth rate in the following year on average by two percentage points and has still a considerable negative impact in the second year. One important channel through which the effect of housing crises is passed on seems to be the banking sector. In addition, our results suggest that negative wealth effects possibly cause further reductions in GDP.

Keywords: Housing crisis; Panel Data (search for similar items in EconPapers)
JEL-codes: C23 E21 E32 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: COSTS OF HOUSING CRISES: INTERNATIONAL EVIDENCE (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:1524r

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