The Great Mortgaging: Housing Finance, Crises, and Business Cycles

48 Pages Posted: 9 Oct 2014  

Òscar Jordà

Federal Reserve Banks - Federal Reserve Bank of San Francisco

Moritz Schularick

University of Bonn - Department of Economics; Centre for Economic Policy Research (CEPR)

Alan M. Taylor

University of California, Davis - Department of Economics; University of Virginia - Department of Economics; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Date Written: September 30, 2014

Abstract

This paper unveils a new resource for macroeconomic research: a long-run dataset covering disaggregated bank credit for 17 advanced economies since 1870. The new data show that the share of mortgages on banks’ balance sheets doubled in the course of the 20th century, driven by a sharp rise of mortgage lending to households. Household debt to asset ratios have risen substantially in many countries. Financial stability risks have been increasingly linked to real estate lending booms which are typically followed by deeper recessions and slower recoveries. Housing finance has come to play a central role in the modern macroeconomy.

Keywords: leverage, recessions, mortgage lending, financial crises, business cycles, local projections

JEL Classification: C140, C380, C520, E320, E370, E440, E510, G010, G210, N100, N200

Suggested Citation

Jordà, Òscar and Schularick, Moritz and Taylor, Alan M., The Great Mortgaging: Housing Finance, Crises, and Business Cycles (September 30, 2014). CESifo Working Paper Series No. 4993. Available at SSRN: https://ssrn.com/abstract=2507753

Òscar Jordà

Federal Reserve Banks - Federal Reserve Bank of San Francisco ( email )

Moritz Schularick (Contact Author)

University of Bonn - Department of Economics ( email )

Bonn
Germany

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

Alan M. Taylor

University of California, Davis - Department of Economics ( email )

One Shields Drive
Davis, CA 95616-8578
United States
530-752-1572 (Phone)
530-752-9382 (Fax)

HOME PAGE: http://www.econ.ucdavis.edu/faculty/amtaylor/

University of Virginia - Department of Economics ( email )

P.O. Box 400182
Charlottesville, VA 22904-4182
United States
(434)-924-3177 (Phone)
(434)-982-2904 (Fax)

HOME PAGE: http://people.virginia.edu/~amt7u

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

HOME PAGE: http://nber.org

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

HOME PAGE: http://cepr.org

Paper statistics

Downloads
57
Rank
302,795
Abstract Views
227