Debt Deflation

[Michael Perelman]

I don't know about Brad's numbers, but his idea is correct.  In
Youngstown, people remained in place even without jobs, because they could
not afford to sell their houses.  Arson became a major industry.

On Fri, Jul 26, 2002 at 01:41:43PM -0700, Brad DeLong wrote:
> 
> Bob Shiller says that in America nobody can ever face selling a house 
> for less than 80% of the maximum they thought it was worth, so 
> whenever housing prices in an area drop 20% below their previous 
> peak, they stop dropping, and instead volume of transactions drops to 
> near zero...
> 
> 
> Brad DeLong

-- 
Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael at ecst.csuchico.edu