In the last 8 months there’s been a ton of research validating the theory and arguments of the “balance-sheet recession.” I wrote up a literature summary of this research as a Roosevelt Institute white paper: “How Mortgage Debt is Holding Back the Recovery.” You can download a PowerPoint presentation on the paper as well.
This paper was designed to give some background for those interested in understanding this powerful theory, backed by the latest empirical research, and needed to be caught up. I noticed that the latest Economic Report of the President and the latest IMF World Economic report were backing this theory and these researchers. It is important for activists to understand that elite opinion is moving on the conneciton of the housing bubble collapse and slow growth and mass unemployment, and this will have implications for those arguing against foreclosures and for debtor relief.
The key of the report is the following graph, which summarizes the four papers I dig into:
I’ll be discussing the individual reports in the future. I had previously interviewed Amir Sufi on the first two papers last fall.
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