House of Debt
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House of Debt : How They (and You) Caused the Great Recession, and How We Can Prevent it from Happening Again

4.29 (439 ratings by Goodreads)
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Description

The Great American Recession resulted in the loss of eight million jobs between 2007 and 2009. More than four million homes were lost to foreclosures. Is it a coincidence that the United States witnessed a dramatic rise in household debt in the years before the recession - that the total amount of debt for American households doubled between 2000 and 2007 to $14 trillion? Definitely not. Armed with clear and powerful evidence, Atif Mian and Amir Sufi in House of Debt reveal how the Great Recession and Great Depression, as well as the current economic malaise in Europe, were caused by a large run up in household debt followed by a significantly large drop in household spending. Though the banking crisis captured the public's attention, Mian and Sufi argue strongly with real data that current policy is too heavily biased toward protecting banks and creditors, with the goal of increasing the flow of credit, a response that is disastrously counterproductive when the fundamental problem is actually too much debt. As their research shows, excessive household debt leads to foreclosures and makes people spend less and save more. Less spending means less demand for goods, followed by declines in production and huge job losses. How do we end such a cycle? With a direct attack on debt, say Mian and Sufi. More aggressive debt forgiveness after the crash helps, but we can be rid of painful bubble-and-bust episodes only if the financial system moves away from its reliance on inflexible debt contracts. As an example, they propose new mortgage contracts that are built on the principle of risk-sharing, a concept that would have prevented the housing bubble from emerging in the first place. House of Debt offers convincing answers to some of the most important questions facing the modern economy today.show more

Product details

  • Hardback | 192 pages
  • 160 x 230 x 24mm | 280g
  • The University of Chicago Press
  • University of Chicago Press
  • Chicago, IL, United States
  • English
  • 15 line drawings
  • 022608194X
  • 9780226081946
  • 111,328

Review quote

"Mian and Sufi have produced some of the most important and compelling research on the impact of debt on consumer behavior during the recent housing bubble and bust. This excellent new book presents and expands this research in a rigorous, yet engaging and accessible way." (Christina D. Romer, former chair of the Council of Economic Advisers) "This is a profoundly important book that makes a huge range of serious empirical evidence on the financial crisis accessible to a broad readership." (Kenneth Rogoff, Harvard University)"show more

About Atif Mian

Atif Mian is professor of economics and public policy at Princeton University. Amir Sufi is professor of finance at the University of Chicago Booth School of Business.show more

Rating details

439 ratings
4.29 out of 5 stars
5 46% (200)
4 41% (181)
3 11% (48)
2 2% (8)
1 0% (2)
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