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

Authors

Moritz Schularick

Alan M. Taylor

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2014-23 | September 1, 2014

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.

Article Citation

Taylor, Alan M., Moritz Schularick, and Oscar Jorda. 2014. “The Great Mortgaging: Housing Finance, Crises, and Business Cycles,” Federal Reserve Bank of San Francisco Working Paper 2014-23. Available at https://doi.org/10.24148/wp2014-23

About the Author
Òscar Jordà
Òscar Jordà is a senior policy advisor in the Economic Research Department of the Federal Reserve Bank of San Francisco. Learn more about Òscar Jordà