Building on easy money:The political economy of housing bubbles in Ireland and Spain
This paper undertakes a structured, focused case-study comparison of housing bubbles in Ireland and Spain, based on the selection of two most-different cases that nonetheless share a common outcome of interest. Both countries were exposed to the same set of changes in their international policy environment in the late 1990s and early 2000s, in the form of a low interest rate regime associated with the creation of European Monetary Union (EMU). The two countries have very different economic structures, different political decision-making profiles, and different relationships between the political and banking systems. Yet these two countries had the most extreme experience of housing bubbles during the 200os, and both suffered a similar construction-related economic collapse that ruined their respective banking systems after 2008. The paper argues that the decision-making taking place within their very different domestic institutional frameworks was subordinated to the fact that they shared a similar form of international vulnerability. Both were extremely open to mobile international capital during the 2000s. Their vulnerability to financialization resulted in a common experience of very rapid asset price inflation, which left both countries particularly exposed when the international financial collapse took place. The shared experience of European ‘peripherality’ meant that two countries belonging to different ‘varieties of capitalism’ ended up with very similar kinds of economic collapse.
|Date of creation:||08 Oct 2013|
|Contact details of provider:|| Postal: Arts Annexe, Belfield, Dublin 4|
Phone: +353 1 7164615
Fax: +353 1 7161108
Web page: http://www.ucd.ie/geary/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Michelle Norris & Menelaos Gkartzios, 2011. "Twenty years of property-led urban regeneration in Ireland : outputs, impacts, implications," Open Access publications 10197/5166, Research Repository, University College Dublin.
- Callan, Tim & Walsh, John R. & Coleman, Kieran, 2005. "Tax Expenditures," Papers BP2006/3, Economic and Social Research Institute (ESRI).
- Sebastian Dellepiane Avellaneda & Niamh Hardiman, 2010. "The European Context of Ireland’s Economic Crisis," The Economic and Social Review, Economic and Social Studies, vol. 41(4), pages 473-500.
- Michelle Norris & Menelaos Gkartzios, 2011. "Twenty years of property-led urban regeneration in Ireland: outputs, impacts, implications," Public Money & Management, Taylor & Francis Journals, vol. 31(4), pages 257-264, July.
- repec:esr:chaptr:jacb200505 is not listed on IDEAS
- Morgan Kelly, 2009.
"The Irish Credit Bubble,"
200950, Geary Institute, University College Dublin.
- Morgan Kelly, 2009. "The Irish credit bubble," Working Papers 200932, School of Economics, University College Dublin.
- Christophe André, 2010. "A Bird's Eye View of OECD Housing Markets," OECD Economics Department Working Papers 746, OECD Publishing.
- Thomas Conefrey & John Fitz Gerald, 2010. "Managing Housing Bubbles In Regional Economies Under Emu: Ireland And Spain," National Institute Economic Review, National Institute of Economic and Social Research, vol. 211(1), pages 91-108, January.
- Conefrey, Thomas & FitzGerald, John, 2009. "Managing Housing Bubbles in Regional Economies under EMU: Ireland and Spain," Papers WP315, Economic and Social Research Institute (ESRI).
- Conefrey, Thomas & FitzGerald, John, 2010. "Managing Housing Bubbles in Regional Economies Under EMU: Ireland and Spain," Papers RB2010/2/1, Economic and Social Research Institute (ESRI).
- Pedro Lains, 2008. "The Portuguese Economy in the Irish Mirror, 1960–2004," Open Economies Review, Springer, vol. 19(5), pages 667-683, November.
- Blánaid Clarke & Niamh Hardiman, 2012. "Crisis in the Irish Banking System," Working Papers 201203, Geary Institute, University College Dublin.
- Kearney, Ide, 2012. "Measuring Fiscal Stance," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI), vol. 2012(3-Autumn).
- Hall, Peter A. & Gingerich, Daniel W., 2009. "Varieties of Capitalism and Institutional Complementarities in the Political Economy: An Empirical Analysis," British Journal of Political Science, Cambridge University Press, vol. 39(03), pages 449-482, July.
- José Gabriel Palma, 2009. "The revenge of the market on the rentiers," Cambridge Journal of Economics, Oxford University Press, vol. 33(4), pages 829-869, July. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:ucd:wpaper:201318. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Geary Tech)
If references are entirely missing, you can add them using this form.