Betting the House: Bank Credit, Real Estate Prices, and Financial Crises (1870-2010)

02 July 2014
17:30  - 19:00
House of Finance, Goethe University

Moritz Schularick, University of Bonn

What does macroeconomic history have to say about the much debated link between loose monetary conditions, credit growth and housing booms? Understanding the sources of house price fluctuations and their effect on household balance sheets and the health of financial intermediaries has become a top priority for macro-economists and policymakers. The financial history of the past 140 years shows that loose monetary conditions have regularly led to booms in real estate lending and house prices which in turn have materially heightened the risk of banking crises.




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