Rethinking Housing Bubbles: The Role of Household and Bank Balance Sheets in Modeling Economic Cycles

ISBN-13: 9780521198097 / Angielski / Twarda / 2014 / 304 str.

Steven Gjerstad; Vernon L. Smith

Opis

Balance sheet crises, in which the prices of widely held and highly leveraged assets collapse, pose distinctive economic challenges. An understanding of their causes and consequences is only recently developing, and there is no agreement on effective policy responses. From backgrounds in experimental economics, Steven Gjerstad and Nobel laureate Vernon L. Smith examine events that led to and resulted from the recent U.S. housing bubble and collapse, as a case study in the formation and propagation of balance sheet crises. They then examine all previous downturns in the U.S. economy, including the Great Depression, and document substantive differences between the recurrent features of economic cycles and financial crises and the beliefs that public officials hold about them, especially within the Federal Reserve System. They conclude with an examination of similar events in other countries and assess alternative strategies to contain financial crises and to recover from them.

Recenzje

'This book was a pleasure to read and is highly recommended to anyone interested in financial-economic crises. It offers many intuitive stories of potential causes of the crisis, particularly the pivotal role of the housing market with historical data from the Great Recession, the Great Depression, earlier US recessions and crises in other countries, all nicely illustrated by clear time series plots and graphs and backed up by tables. The book also offers stimulating ideas for behavioral agent-based modeling of the crisis supported by insights and data from laboratory experiments.' Cars Hommes, Journal of Economic Psychology

Spis treści

1. Economic crises, economic policy, and economic analysis; 2. Goods and service markets vs. asset markets; 3. Asset performance: housing and the Great Recession; 4. The Great Depression; 5. The postwar recessions; 6. What may have triggered or sustained the housing bubble, 1997–2006?; 7. The bubble bursts: subprime mortgages, derivatives, and banking collapse; 8. Blindsided experts; 9. What might be done?; 10. Learning from foreign economic crises: consequences, responses, and policies; 11. Summarizing: what have we learned?