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Housing, Debt and the Economy: A Tale of Two Countries

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  • John Muellbauer
Abstract
In housing affordability levels and volatility, there could hardly be a greater contrast than between the UK and Germany. Differences in history, institutions and policies are explored in this paper. Residential housing supply has been far more expansionary in Germany and mortgage credit more tightly regulated. A sensibly regulated rental market and stable German house prices have combined to leave the rental sector with over half of tenures. Policy failures in the UK have resulted in widening intergenerational inequality, increased social exclusion, adversely affected productivity and growth and raised the risk of financial instability. Policy lessons are drawn for the UK, which go far beyond the remit of the immediately responsible Ministry of Housing, Communities and Local Government.

Suggested Citation

  • John Muellbauer, 2018. "Housing, Debt and the Economy: A Tale of Two Countries," National Institute Economic Review, National Institute of Economic and Social Research, vol. 245(1), pages 20-33, August.
    • Handle: RePEc:sae:niesru:v:245:y:2018:i:1:p:r20-r33
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    References listed on IDEAS

    as
    1. Valérie Chauvin & John Muellbauer, 2018. "Consumption, household portfolios and the housing market in France," Economie et Statistique / Economics and Statistics, Institut National de la Statistique et des Etudes Economiques (INSEE), issue 500-501-5, pages 157-178.
    2. Emilio Fernandez-Corugedo & John Muellbauer, 2006. "Consumer credit conditions in the United Kingdom," Bank of England working papers 314, Bank of England.
    3. Janine Aron & John V. Duca & John Muellbauer & Keiko Murata & Anthony Murphy, 2012. "Credit, Housing Collateral, And Consumption: Evidence From Japan, The U.K., And The U.S," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 58(3), pages 397-423, September.
    4. John Muellbauer, 2005. "Property Taxation and the Economy after the Barker Review," Economic Journal, Royal Economic Society, vol. 115(502), pages 99-117, March.
    5. Muellbauer, John, 1992. "Anglo-German differences in housing market dynamics : The role of institutions and macro economic policy," European Economic Review, Elsevier, vol. 36(2-3), pages 539-548, April.
    6. Muellbauer, John & Geiger, Felix & Rupprecht, Manuel, 2016. "The housing market, household portfolios and the German consumer," Working Paper Series 1904, European Central Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. zu Ermgassen, Sophus & Drewniok, Michal & Bull, Joseph & Walker, Christine Corlet & Mancini, Mattia & Ryan-Collins, Josh & Serrenho, André Cabrera, 2022. "A home for all within planetary boundaries: pathways for meeting England’s housing needs without transgressing national climate and biodiversity goals," OSF Preprints 5kxce, Center for Open Science.
    2. Josh Ryan‐Collins, 2021. "Private Landed Property and Finance: A Checkered History," American Journal of Economics and Sociology, Wiley Blackwell, vol. 80(2), pages 465-502, March.
    3. Murray, Cameron & Ryan-Collins, Josh, 2020. "When homes earn more than jobs: the rentierization of the Australian housing market," OSF Preprints 8f67h, Center for Open Science.
    4. Paul Cheshire, 2019. "The Costs of Containment: Or the Need to Plan for Urban Growth," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 20(03), pages 10-14, October.
    5. Josh Ryan-Collins, 2021. "Breaking the housing–finance cycle: Macroeconomic policy reforms for more affordable homes," Environment and Planning A, , vol. 53(3), pages 480-502, May.
    6. zu Ermgassen, Sophus O.S.E. & Drewniok, Michal P. & Bull, Joseph W. & Corlet Walker, Christine M. & Mancini, Mattia & Ryan-Collins, Josh & Cabrera Serrenho, André, 2022. "A home for all within planetary boundaries: Pathways for meeting England's housing needs without transgressing national climate and biodiversity goals," Ecological Economics, Elsevier, vol. 201(C).
    7. Cheshire, Paul & Carozzi, Felipe, 2019. "Housing Sprint: land report," LSE Research Online Documents on Economics 102339, London School of Economics and Political Science, LSE Library.

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    More about this item

    Keywords

    Housing markets in the UK and Germany; housing affordability; property taxation; land-use and rental regulations; mortgage markets; house prices and volatility; residential mobility;
    All these keywords.

    JEL classification:

    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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