The causes behind the boom and bust of house prices over the past decade or so are generally boiled down to three possible culprits:
Recent research points more strongly to one in particular: that people’s beliefs about house prices had changed.
Greg Kaplan, an economics professor at the University of Chicago, discussed this finding in his paper “Consumption and House Prices in the Great Recession: Model Meets Evidence,” presented at the St. Louis Advances in Research (STLAR) Conference on April 7-8. In the video above, he discussed his work in an interview with St. Louis Fed Vice President and Economist David Andolfatto.
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