Housing markets and the wider economy under global shocks: 1970-2021

Squires, Graham
Trinh, H
Webber, D
Conference Contribution - published
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Several previous papers have detected the effects of a global crisis on an economy or a certain market, while the world has experienced several global financial crises since 1970 and their impacts on the economy leave behind a big question ‘Which Global Shock makes the world economy worst in a comparison with the other ones?”. On the other hand, housing affordability has been a chronic problem in several big cities and countries especially its trend over several global crises in conjunction with the wider economy plus other critical factors such as social-economic, educational, poverty, inequality, and country governance effectiveness. Given this motivation, this study aims to investigate the effects and interactions of housing markets and the wider economy in the pre-, during, and post-periods of main global shocks over the last five decades. Using a global sample of 48 countries for the period 1970-2020, the sample allows the study to include the main 6 global crises including the oil price shock of 1973-1975, the global recession of 1982-1983, the global recession of 1990-1991, the global financial crisis of 2007-2009, and the health pandemic of 2019-2020. Not surprisingly, the preliminary empirical results show the housing markets, affordability, and the wider economy are significantly affected during the main world crises since 1970, however, those effects and their divergence between housing markets and the economy are changed across countries given their differences in demographic, social, and economic determinants throughout the world. The study provides important findings, policy implications, and backgrounds to policymakers, economists, and governments based on the empirical evidence from the past global crises for more sustainable development in the future.
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