Asset inflation and deflation triggered by the US housing financial system

Vol. 28 No. 3 (2008)

Jul-Sep / 2008
Published July 1, 2008
PDF-Portuguese (Português (Brasil))
PDF-Portuguese (Português (Brasil))

How to Cite

Freitas, Maria Cristina Penido de, and Marcos Antonio Macedo Cintra. 2008. “Asset Inflation and Deflation Triggered by the US Housing Financial System”. Brazilian Journal of Political Economy 28 (3):414-33. https://centrodeeconomiapolitica.org.br/repojs/index.php/journal/article/view/534.

Asset inflation and deflation triggered by the US housing financial system

Maria Cristina Penido de Freitas
Professora do Departamento de Economia da PUC-SP
Marcos Antonio Macedo Cintra
Professor do Instituto de Economia da Unicamp e pesquisador do CNPq,
Brazilian Journal of Political Economy, Vol. 28 No. 3 (2008), Jul-Sep / 2008, Pages 414-433

Abstract

 This paper deals with the financial crisis triggered after the default of subprime mortgages in the United States which expanded to a global systemic crisis. It is divided into a brief introduction and three sections. The first section sums up the dynamics of inflation and deflation of real estate and financial assets which characterizes finance-led cycles. The second section covers major effect of financial assets deflation on the American and European banks. The third section focuses on measures implemented by central banks in order to manage this financial crisis.

JEL Classification: E31; E32; G12; G21; G24.


Keywords: subprime mortgages financial innovations financial crisis asset inflation and deflation role of central banks