In 1946 the economist Arthur Burns defined a business cycle as a period of expansion occurring about the same time in many economic activities, followed by similar general recessions, contractions and revivals, which merge into the expansion phase of the next cycle. Cycles may take from one year...

The U.S. housing market crash in 2007-2008 was not caused overnight by an over-supply of new homes that could not be sold. It was caused by the new money flows into mortgages ever since 1998. What changed in 1998 was that mortgage funds were not only used for building new homes at a price in...

Savings are allocated over the acquisition of assets like homes, shares and bonds and government debt paper. For a home acquisition an individual household uses own equity provided by the buyer and outside equity provided by banks. Such outside equity can help to increase the volume of new...

Economic growth data does not show how such growth was achieved. Was it based on income growth and consumption spending levels or was it based on borrowings to extend the income levels? The question is vital for deciding which economic tools work best for correcting imbalances. The main...

The real financial crisis in the U.S. and in other countries did not take place in the banking or the wider financial sector -yes banks and others financial institutions were affected by their own induced excessive lending schemes- but no, it seriously affected the individual households. More...

Cars and also equipment used in production processes depreciate in value through their use. Other assets like homes, share and bonds do not depreciate in the same manner. The latter asset values go up and down not as a consequence of the remaining life period, but because of their links with...

The U.S financial crisis started in October 2005. The level of new home starts would have replaced the total owner occupied housing stock in 37 years. Much faster than desirable. Mortgage interest rates also went up in same month. In 2006 mortgage lending went on unabated, but housing values did...

Savers, including pension savers, convert savings into assets: homes,government bonds and shares.The conversion of savings is for the very long term. Once monies are turned into assets, the reverse process of turning assets into cash cannot be achieved by all savers together. Unavoidably some...

In the U.K. public housing policy has sought to achieve (at least one of) three distinguished goals: to provide shelter and accommodation for all families, to encourage home ownership and to encourage construction as a tool of counter-cyclical macroeconomic policy. Over the last decade,...

The world’s financial crisis happened in 2008, but the U.S. individual households’ income and savings crisis happened before that: the latter one was already at crisis point in 2005 and 2006. The key of any analysis about the households’ income and savings crisis should start with the...