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Implications of Asymmetric Information in the Real Estate Crisis in US

Author

Listed:
  • Marta Christina SUCIU

    (Bucharest Academy of Economic Studies)

  • Luciana PICIORUŞ

    (Bucharest Academy of Economic Studies)

  • Cosmin Ionuţ IMBRIŞCĂ

    (Bucharest Academy of Economic Studies)

Abstract

The economic crisis is now a common reality in most parts of the world, being translated in mass unemployment, collapse of the social system and an impressive number of bankruptcies. The paper focuses on the beginning of the recession in the American real estate sector by analyzing the implications of imperfect information and moral hazard as main factors that contributed to the deterioration of real estate market and also to accentuating the overall poor economic situation. In that context, asymmetric information served the interests of banks and other institutional speculators who made use of it in order to increase their profitability through market manipulation. The central aspect the paper underlines is the international contamination created by disguising toxic real estate actives and spreading them throughout the global economy through transactions with foreign business partners.

Suggested Citation

  • Marta Christina SUCIU & Luciana PICIORUŞ & Cosmin Ionuţ IMBRIŞCĂ, 2011. "Implications of Asymmetric Information in the Real Estate Crisis in US," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(1(554)), pages 173-188, January.
    • Handle: RePEc:agr:journl:v:xviii(2011):y:2011:i:1(554):p:173-188
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    Cited by:

    1. Chih-Hsiung Chang & Wu-Hua Chang & Yi-Yu Shih, 2022. "Is Financial Institution Management Effective to Reduce Problems Related to Information Asymmetry in Taiwan?," Bulletin of Applied Economics, Risk Market Journals, vol. 9(2), pages 37-58.

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