Last week, Paul Krugman wrote in his blog about Postmodern Business Cycles. He claims that “booms… have died because of overbuilding and excessive level of debt.”. Later on, he claims that ” The 2007-? slump was brought on by the bursting of a housing and debt bubble” As I said in previous posts, there was no excessive level of debt and there was no housing bubble.
* Between 1963 and 1969
** Between 1998 and 2007. During the 2000s was 1.44 and the ratio 0.53
Data also does not suggest there was an overbuilding period before 2007. The ratio between the average housing starts and the population growth was lower during the decade before 2007 than during the 1970s and 1980s and almost at the same level than during the 1960s. We should bear in mind that it was very low during the 1990s and a recovery could be expected.
** Between 1998 and 2007. During the 2000s was 1.44 and the ratio 0.53
Data also does not suggest there was an overbuilding period before 2007. The ratio between the average housing starts and the population growth was lower during the decade before 2007 than during the 1970s and 1980s and almost at the same level than during the 1960s. We should bear in mind that it was very low during the 1990s and a recovery could be expected.
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