Titre : |
Understanding and interpretation of the role and impact on the US economy of real estate, particularly in the 2008-subprime-mortgage crisis. |
Type de document : |
Mémoire |
Auteurs : |
Loranna LEBOULANGER, Auteur |
Année de publication : |
2020 |
Importance : |
26 p. |
Note générale : |
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Langues : |
Anglais (eng) |
Mots-clés : |
Management IMMOBILIER SECTEUR ; IMMOBILIER ; CRISE ECONOMIQUE ; ETATS-UNIS D'AMERIQUE ; CAPITALISME
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Résumé : |
In 2007, a real estate bubble busted in the USA and caused a global financial crisis that lasted longer than expected clouding future growth horizons. The USA led the global economy with an unsustainable high growth model, but it stopped abruptly because of 2 pillars: indebtedness and speculation. This paper aims at understanding and interpret the role and impact on the American economy of real estate particularly in the 2008-subprime mortgage crisis.
Through an extended literature review with Minsky works (instability and safety cushion) as an academic framework, it starts by understanding the normal role and impact of real estate in the economy particularly through wealth effect and the role of credit in household debt development, paving the way for the 2008 dreadful crisis. At the root cause of the latter was financialization of real estate through securitization. The crisis spilled-over to the real economy and questioned companies’ choices and strengths. The credit crunch it originated mainly because of bank fragilization due to Mortgage-Backed-Securities (MBS) fragilized in their turn the whole economy and caused a shift in financing choices (all cost of financing rose). This situation rose questions about a possible global contagion in which there is still no consensus. Minsky was ignored for a long time but during and after the crisis, authors questioned if his hypothesis could apply in the development of a breeding ground to the crisis or not, offering solutions to prevent it from happening again. Ultimately, the real estate has a strong impact on the economy particularly in downturns times because of its very close link with indebtedness and credit, suffering from an overconfidence in prices and market.
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Programme : |
PGE-Rouen |
Spécialisation : |
Finance d’Entreprise - Corporate Finance |
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