It's housing, stupid. Which is a proximate cause of the lagging "recovery" that isn't for most people. The housing channel is not only a major component of investment but housing also drives consumer spending on house and home related items such as furnishings. The obvious question is why housing remains in the tank with so many years of historically low mortgage rates. Here is the income channel, as well as a higher propensity to save (increased liquidity preference owing to heightened uncertainty and reduced expectations).
Monetary Realism
Business Cycles: Are they really that mysterious?
Michael Sankowski
1 comment:
Justin reminds us also about the advent of higher levels of student loan debt which has somewhat displaced an ability to get approved on a home loan... rsp
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