Kiel Working Papers, Kiel Institute for World Economics
No 1510:
National and International Business Cycle Effects of Housing Crises
Nils Jannsen
Abstract: Housing crises usually go hand in hand with a long lasting
recession and a considerable loss in output. We first re-examine the
effects of a housing crises on the business cycle based on historical
crises. Then we estimate the international spill-over-effects if several
huge industrial countries face a housing crisis simultaneously. While the
economic impact of the housing crisis in the United States, from a
historical perspective, should have bottomed out at the end of 2008 and the
business cycle pattern differed significantly from that in a typical
crisis, house prices in Great Britain, Spain and France just started to
drop at the end of 2007. If we assume that a typical housing crisis occurs
in all of these three countries, international transmission effects then
would lead to significant losses of GDP growth in several other countries,
notably in Europe
Keywords: Housing Crisis, Business Cycle, International Transmission, Global VAR; (follow links to similar papers)
JEL-Codes: C50,; E32,; F42; (follow links to similar papers)
23 pages, April 2009
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