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Crashes, Contagion, Cygnus, and Complexities: Global Economic Crises and Real Estate

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  • Michael D. Edelstein

    (MDE Enterprises, LLC)

  • Robert H. Edelstein

    (University of California at Berkeley)

Abstract

The fundamental message of this paper is simple and fourfold. The world has endured many economic - financial frenzies, panics, and crises that, at first glance, appear to be remarkable and special, but upon closer examination, mirror each other in several ways. Typically, these historical economic crises are resultant of excessive debt, contain a trigger event that creates a "crisis in confidence", suffer a boom bust cycle with significantly enhanced financial and economic volatilities, and generate a boom bust cycle that leads to major contagion effects across the financial and real sectors and spreads internationally. Our analysis as a case study examines and demonstrates that the Great Financial Crisis of 2007-2008 exhibits extraordinary causal features and similarities with the Long Depression of 1873.

Suggested Citation

  • Michael D. Edelstein & Robert H. Edelstein, 2020. "Crashes, Contagion, Cygnus, and Complexities: Global Economic Crises and Real Estate," International Real Estate Review, Global Social Science Institute, vol. 23(3), pages 311-336.
    • Handle: RePEc:ire:issued:v:23:n:03:2020:p:311-336
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    References listed on IDEAS

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    1. Charles P. Kindleberger & Robert Z. Aliber, 2005. "Manias, Panics and Crashes," Palgrave Macmillan Books, Palgrave Macmillan, edition 0, number 978-0-230-62804-5.
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    3. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "Varieties of Crises and Their Dates," Introductory Chapters, in: This Time Is Different: Eight Centuries of Financial Folly, Princeton University Press.
    4. Stiglitz, Joseph E, 1996. "Some Lessons from the East Asian Miracle," The World Bank Research Observer, World Bank, vol. 11(2), pages 151-177, August.
    5. Jon R. Moen & Ellis W. Tallman, 1990. "Lessons from the panic of 1907," Economic Review, Federal Reserve Bank of Atlanta, issue May, pages 2-13.
    6. Musson, A. E., 1959. "The Great Depression in Britain, 1873–1896: a Reappraisal," The Journal of Economic History, Cambridge University Press, vol. 19(2), pages 199-228, June.
    7. Steven Radelet & Jeffrey D. Sachs, 1998. "The East Asian Financial Crisis: Diagnosis, Remedies, Prospects," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(1), pages 1-90.
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    Cited by:

    1. Maryna Brychko & Tetyana Vasilyeva & Zuzana Rowland & Serhiy Lyeonov, 2021. "Does the real estate market behavior predict the trust crisis in the financial sector? The case of the ECB and the Euro," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 16(4), pages 711-740, December.

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    More about this item

    Keywords

    Economic and Real Estate Booms and Busts; Depressions; Economic Crashes; Global Economic Crises; Economic Contagion;
    All these keywords.

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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