Skip to content
Register Sign in Wishlist
Rethinking Housing Bubbles

Rethinking Housing Bubbles
The Role of Household and Bank Balance Sheets in Modeling Economic Cycles


  • Date Published: July 2014
  • availability: Available
  • format: Hardback
  • isbn: 9780521198097

£ 44.99

Add to cart Add to wishlist

Other available formats:

Looking for an inspection copy?

This title is not currently available on inspection

Product filter button
About the Authors
  • In this highly original piece of work, Steven D. Gjerstad and Nobel Laureate Vernon L. Smith analyze the role of housing and its associated mortgage financing as a key element of economic cycles. The authors combine data from both laboratory and real markets to provide insight into the bubble propensity of real-world economic actors and use novel historical analysis on the Great Recession, the Great Depression, and all of the post-World War II recessions to establish the critical roles of housing, private-capital investment, and household and private institutional balance sheets in economic cycles. They develop a model that incorporates household balance sheets and bank balance sheets and offers insights based on this analysis concerning policy going forward, effectively changing the way economists think about economic cycles.

    • Utilizes data series on mortgages, house prices, mortgage defaults and delinquencies, international capital flows, and economic output by sector
    • Examines similar developments in other countries to understand which elements are common to financial crises and which features vary
    • Written by the two leading specialists in experimental economics
    Read more

    Reviews & endorsements

    'This book was a pleasure to read and is highly recommended to anyone interested in financial-economic crises. It offers many intuitive stories of potential causes of the crisis, particularly the pivotal role of the housing market with historical data from the Great Recession, the Great Depression, earlier US recessions and crises in other countries, all nicely illustrated by clear time series plots and graphs and backed up by tables. The book also offers stimulating ideas for behavioral agent-based modeling of the crisis supported by insights and data from laboratory experiments.' Cars Hommes, Journal of Economic Psychology

    Customer reviews

    Not yet reviewed

    Be the first to review

    Review was not posted due to profanity


    , create a review

    (If you're not , sign out)

    Please enter the right captcha value
    Please enter a star rating.
    Your review must be a minimum of 12 words.

    How do you rate this item?


    Product details

    • Date Published: July 2014
    • format: Hardback
    • isbn: 9780521198097
    • length: 304 pages
    • dimensions: 235 x 157 x 22 mm
    • weight: 0.54kg
    • contains: 52 b/w illus. 10 tables
    • availability: Available
  • Table of Contents

    1. Economic crises, economic policy, and economic analysis
    2. Goods and service markets vs. asset markets
    3. Asset performance: housing and the Great Recession
    4. The Great Depression
    5. The postwar recessions
    6. What may have triggered or sustained the housing bubble, 1997–2006?
    7. The bubble bursts: subprime mortgages, derivatives, and banking collapse
    8. Blindsided experts
    9. What might be done?
    10. Learning from foreign economic crises: consequences, responses, and policies
    11. Summarizing: what have we learned?

  • Authors

    Steven D. Gjerstad, Chapman University, California
    Steven D. Gjerstad is a presidential Fellow at Chapman University in Orange, California. After receiving his PhD in economics from the University of Minnesota, he worked for ten years on theoretical and computational models of market price adjustment processes and on experimental tests of those models. His work on price adjustment has appeared in Economic Theory, Games and Economic Behavior, and the Journal of Economic Dynamics and Control. In the past five years, the emphasis of his work has shifted toward an examination of adjustment processes in the aggregate economy, with an emphasis on financial crises and economic restructuring. That work has been published in the Wall Street Journal, the Critical Review, The American Interest magazine, and the Cato Journal, as well as by the National Bureau of Economic Research.

    Vernon L. Smith, Chapman University, California
    Vernon L. Smith was awarded the Nobel Prize in Economic Sciences in 2002 for his groundbreaking work in experimental economics. He has joint appointments in the Argyros School of Business and Economics and the School of Law at Chapman University, and he is part of a team that will create and run the new Economic Science Institute there. Dr Smith has authored or co-authored more than 250 articles and books on capital theory, finance, natural resource economics, and experimental economics. He serves or has served on the board of editors of the American Economic Review, the Cato Journal, the Journal of Economic Behavior and Organization, the Journal of Risk and Uncertainty, Science, Economic Theory, Economic Design, Games and Economic Behavior, and the Journal of Economic Methodology. He is a past president of the Public Choice Society, the Economic Science Association, the Western Economic Association, and the Association for Private Enterprise Education. He received his PhD from Harvard University.

Sign In

Please sign in to access your account


Not already registered? Create an account now. ×

Sorry, this resource is locked

Please register or sign in to request access. If you are having problems accessing these resources please email

Register Sign in
Please note that this file is password protected. You will be asked to input your password on the next screen.

» Proceed

You are now leaving the Cambridge University Press website. Your eBook purchase and download will be completed by our partner Please see the permission section of the catalogue page for details of the print & copy limits on our eBooks.

Continue ×

Continue ×

Continue ×

Find content that relates to you

Join us online

This site uses cookies to improve your experience. Read more Close

Are you sure you want to delete your account?

This cannot be undone.


Thank you for your feedback which will help us improve our service.

If you requested a response, we will make sure to get back to you shortly.

Please fill in the required fields in your feedback submission.