The authors are grateful to the editor and two anonymous referees for helpful comments and suggestions. They would like to thank Markus Pape for valuable research assistance and Paul Kramer for carefully proofreading the manuscript.
COSTS OF HOUSING CRISES: INTERNATIONAL EVIDENCE
Article first published online: 9 DEC 2011
© 2011 The Authors. Bulletin of Economic Research © 2011 John Wiley & Sons Ltd and the Board of Trustees of the Bulletin of Economic Research
Bulletin of Economic Research
Volume 65, Issue 4, pages 299–313, October 2013
How to Cite
Aßmann, C., Boysen-Hogrefe, J. and Jannsen, N. (2013), COSTS OF HOUSING CRISES: INTERNATIONAL EVIDENCE. Bulletin of Economic Research, 65: 299–313. doi: 10.1111/j.1467-8586.2011.00408.x
- Issue published online: 9 SEP 2013
- Article first published online: 9 DEC 2011
- housing crisis;
- panel data;
This paper analyses 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 growth.