Items with a * are fair game for exams.
1. The Housing Bubble
Economist John Taylor blames policy makers (including the Fed) for the Great Recession in the American Economic Review.
* Taylor, John. 2014. “The Role of Policy in the Great Recession and the Weak Recovery.” The American Economic Review, 104(5): 61-66.
Here is a 2008 Washington Post article on the housing boom and bust.
Klein, Alec and Zachary Goldfarb, 6/15/08. “The Bubble: How Homeowners, Speculators, and Wall Street Dealmakers Rode a Wave of Easy Money with Crippling Consequences.” Washington Post.
This paper from the Economic Journal is a more academic source. It shows that lenders in areas with rapidly rising housing prices responded by lowering their standards. I encourage you to give it a shot. While the bulk of the paper will probably give you trouble (e.g. the econometric sections), the introduction nicely summarizes the authors’ findings.
Duca, J., Muellbauer, J., and A. Murphy. 2011. “House Prices and Credit Constraints: Making Sense of the US Experience.” Economic Journal, Vol. 121 (552): 533-551.
This policy paper from the Brookings Institute discusses poor housing affordability in the U.S. post-pandemic.
Gyourko, J. March 18, 2026. “Thinking About the Growing Housing Affordability problem. Brooking’s Reserach.
2. Speculative Bubbles
*Broughal, James. May 7, 2026. “How We Know the Housing Boom Became a Bubble.” Forbes.
Robert Shiller has a New York Times op/ed piece on information cascades:
Shiller, Robert. 3/2/08. “How a Bubble Stayed Under the Radar,” New York Times
This paper from the New York Fed from 2004 considers the issue of whether there was a housing bubble. It ultimately concludes that there was no bubble. Keep in mind that 1) the authors didn’t have the benefit of hindsight, and 2) it was written prior to the peak of the bubble.
McCarthy, J. and R. Peach. 2004. “Are Home Prices the Next Bubble.” Federal Reserve Bank of New York Economic Policy Review, 10(3): 1-17.
Here are some lecture notes from Peter Ireland on the asset pricing model. There are a few differences from the model presented in class, namely he ignores expectations and assumes a constant interest rate.
3. Policy and Housing
*Read this paper by Edward Leamer. It is long and parts of it are technical. But you should be able to follow its main points.
Leamer, Edward. 2007. “Housing is the Business Cycle.” Proceedings, Federal Reserve Bank of Kansas City, 149-233.
*Here is Frank Smet’s reply.
Smets, Frank. “Commentary: Housing is the Business Cycle.” Proceedings, Federal Reserve Bank of Kansas City, 235-242.
*Here is some additional commentary.
“General Discussion: Housing is the Business Cycle.” Session chaired by Issing, O. Proceedings, Federal Reserve Bank of Kansas City, 245-251.
This paper from the San Fran Fed describes the Fed’s policy in response to the recession and during the housing bubble.
Rudebusch, Glenn. 2009. “The Fed’s Monetary Policy Response to the Current Crisis.” Federal Reserve Bank of San Francisco Economic Letter, 2009-17.
An article by James Hamilton’s blog on the role of Fannie Mae and Freddie Mac. Here is a followup that provides some additional opinions.
Hamilton, James. 7/14/08. “Fannie Mae and Freddie Mac”
Hamilton, James. 7/15/08. “Did Fannie and Freddie cause the mortgage crisis?” adequately
Here is an academic paper quantifying the positive externality from homeownership.
DiPasquale, D. and E,. Glaeser. 1999. “Incentives and Social Capital: Are Homeowners Better Citizens?” Journal of Urban Economics, Vol. 45: 354-384.
Here is a less technical piece from Denise DiPasquale that addresses many of the same issues as the last paper.
DiPasquale, D. 2011.“Rental Housing: Current Market Conditions and the Role of Federal Policy.” Cityscape: A Journal of Policy Development and Research, Vol. 13(2).
James Kwak blames the Fed for the housing bubble in this short post.
Kwak, James. 3/16/09. “He Blames Greenspan,” posted at NPR.com
Paul Shea 