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The Interwar Housing Cycle in the Light of 2001-2011: A Comparative Historical Approach

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  • Alexander J. Field

Abstract

This paper examines the interwar housing cycle in comparison to what transpired in the United States between 2001 and 2011. The 1920s experienced a boom in construction and prolonged retardation in building in the 1930s, resulting in a swing in residential construction’s share of GDP, and its absolute volume, that was larger than what has taken place in the 2000s. In contrast, there was relatively little sustained movement in the real price of housing between 1919 and 1941, and the up and down price movements were remarkably modest, certainly in comparison with more recent experience. The paper documents the higher degree of housing leverage in 2001-2011. And it documents a rate of foreclosure on residential housing post 2006 that is likely higher than during the 1930s. It concludes that balance sheet problems resulting from a prior residential housing boom pose greater obstacles to recovery today than they did in the interwar period.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 18796.

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Date of creation: Feb 2013
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Publication status: published as The Interwar Housing Cycle in the Light of 2001–2012: A Comparative Historical Perspective , Alexander J. Field. in Housing and Mortgage Markets in Historical Perspective , White, Snowden, and Fishback. 2014
Handle: RePEc:nbr:nberwo:18796

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  1. Field, Alexander J, 1984. "Asset Exchanges and the Transactions Demand for Money, 1919-29," American Economic Review, American Economic Association, vol. 74(1), pages 43-59, March.
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Cited by:
  1. Natacha Postel-Vinay, 2014. "Debt Dilution in 1920s America: Lighting the Fuse of a Mortgage Crisis," Working Papers 0053, European Historical Economics Society (EHES).

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