Comments on: Did You Visit the Same Country? http://www.arnoldkling.com/blog/did-you-visit-the-same-country/ taking the most charitable view of those who disagree Mon, 21 Dec 2020 11:09:54 +0000 hourly 1 https://wordpress.org/?v=4.0.32 By: Andrew' http://www.arnoldkling.com/blog/did-you-visit-the-same-country/#comment-466152 Fri, 03 Jun 2016 07:55:39 +0000 http://www.arnoldkling.com/blog/?p=6962#comment-466152 So it wasn’t the actual losses and negative equities, but it was the wealth effect and liss aversion?

How does one know?

]]> By: Lord http://www.arnoldkling.com/blog/did-you-visit-the-same-country/#comment-466147 Thu, 02 Jun 2016 16:42:17 +0000 http://www.arnoldkling.com/blog/?p=6962#comment-466147 Debt leverage supports much larger swings in wealth and much more widely distributed ones which is why financial crises are worse. Risk adverseness also weighs losses more than gains and debt can make tangible net worth negative, spurring deleveraging.

]]> By: Andrew' http://www.arnoldkling.com/blog/did-you-visit-the-same-country/#comment-466141 Thu, 02 Jun 2016 14:22:15 +0000 http://www.arnoldkling.com/blog/?p=6962#comment-466141 “while it has become fashionable to cite the importance of debt in explaining the severity of the downturn”

We are a decade from the peak of the housing bubble, how long do passing fads of economics last? I don’t know that it is fashionable to cite debt to explain the severity of the downturn. What does he mean by severity? There are certainly people who say that the duration of the slack recovery has to do with ongoing de-leveraging. It’s also interesting that he seems to set mortgages aside as not “debt” and doesn’t mention that the home “wealth effect” may have had something to do with evaporating house equity. What exactly allows house prices to rise so fast? The “one variable to rule them all” exercise in a system analysis is like chasing your tail.

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