graphrix_IHB
New member
Ah, this weather makes me want to stay inside and read an <a href="http://www.voxeu.org/index.php?q=node/99">ubernerdy perspective on subprime mess</a>.
<em>The impact of equity and property price bubbles on consumer behaviour is equally damaging. Rising share and house prices make individuals feel wealthier. And the richer people are, the more of their income they spend and the less they save. When the bubble eventually bursts, wealth is recomputed and consumers are left with houses and mortgages that are too large for their paychecks, and investment accounts that are shadows of what they once were.
</em>Hat tip to professor <a href="http://economistsview.typepad.com/">Thoma at the Economists View</a>.
<em>The impact of equity and property price bubbles on consumer behaviour is equally damaging. Rising share and house prices make individuals feel wealthier. And the richer people are, the more of their income they spend and the less they save. When the bubble eventually bursts, wealth is recomputed and consumers are left with houses and mortgages that are too large for their paychecks, and investment accounts that are shadows of what they once were.
</em>Hat tip to professor <a href="http://economistsview.typepad.com/">Thoma at the Economists View</a>.