Professor Ohanian’s research was recently discussed in an article published in The Economist. The article, “Housing is at the root of many of the rich world’s problems” was published in the January 16th edition and an excerpt can be found below—
Housing is at the root of many of the rich world’s problems
Since the second world war, governments across the rich world have made three big mistakes, says Callum Williams
The financial crisis of 2008-10 illustrated the immense dangers of a mismanaged housing market. In America during the early to mid-2000s irresponsible, sometimes illegal, mortgage lending led many households to accumulate more debt than they could sustain. Between 2000 and 2007 America’s household debt rose from 104% of household income to 144%. House prices rose by 50% in real terms. The ensuing wave of defaults led to a global recession and nearly brought down the financial system.