Bigger housing booms create deeper downturns – IMF paper
Rapid home price rises can trigger big economic busts and misallocations of resources, authors find
Booming home prices tend to lead to deeper and longer economic downturns than more moderate expansions of the housing market, research published by the International Monetary Fund on February 28 finds.
The authors – Bruno Albuquerque, Eugenio Cerutti, Yosuke Kido and Richard Varghese – study data on house prices for 68 economies from 1970 to 2023.
The results indicate that periods of rising house prices are associated with higher GDP and consumption growth. However, the authors caution that such
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