The Effects of a Declining Housing Market on the U.S. Economy

Levy Economics Institute Working Paper No. 506

21 Pages Posted: 12 Jul 2007

See all articles by Dimitri B. Papadimitriou

Dimitri B. Papadimitriou

Bard College - Levy Economics Institute

Greg Hannsgen

Bard College - Levy Economics Institute

Gennaro Zezza

University of Cassino - Department of Economics; Bard College - The Levy Economics Institute

Date Written: July 11, 2007

Abstract

Longstanding speculation about the likelihood of a housing market collapse has given way in the past few months to consideration of just how far the housing market will fall and how much damage the debacle will inflict on the economy. In this paper, we discuss recent developments related to the housing market; econometrically assess the magnitude of the impact of housing price decreases on real private expenditure; assess the importance of new types of mortgages and mortgage-related securities; and briefly analyze possible policy responses.

Keywords: Housing Bubble, Housing Prices, Housing and Growth, Housing and Monetary Policy, Stability and Housing Prices, Housing Price Inflation, Securitization, Subprime Mortgages, Consumption

JEL Classification: E210, E300, E440, G100, G210, G230, G280, R310

Suggested Citation

Papadimitriou, Dimitri B. and Hannsgen, Greg and Zezza, Gennaro, The Effects of a Declining Housing Market on the U.S. Economy (July 11, 2007). Levy Economics Institute Working Paper No. 506, Available at SSRN: https://ssrn.com/abstract=999957 or http://dx.doi.org/10.2139/ssrn.999957

Dimitri B. Papadimitriou (Contact Author)

Bard College - Levy Economics Institute ( email )

Blithewood
Annandale-on-Hudson, NY 12504
United States
845-758 7711 (Phone)
845-758 9424 (Fax)

Greg Hannsgen

Bard College - Levy Economics Institute ( email )

Annandale-on-Hudson, NY 12504-5000
United States

Gennaro Zezza

University of Cassino - Department of Economics ( email )

Cassino
Italy

HOME PAGE: http://gennaro.zezza.it

Bard College - The Levy Economics Institute ( email )

Blithewood
Annandale-on-Hudson, NY 12504-5000
United States

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