Interesting post over at The Big Picture. See especially the graph of the the increase in housing prices in OECD countries. I think it certainly supports the idea that what we saw was, in fact, a credit bubble rather than a housing bubble:
The chart below reads to me as having regular cycles, oscillating within a range. But something happened in the early 2000s to have that range explode upwards.
It isn’t clear to me how that graph can be explained by changes in the U. S. tax code alone, the actions of the GSEs, or even the two in combination. I’ve put forward my preferred explanation which starts a bit earlier than 2000 but I’m open to suggestions.
I think I do see some demographic influences on that chart. Isn’t it interesting that the losers of World War II did not experience a bubble while the winners did?
The more I think about it the more I wonder whether the world’s policymakers and central banks (and, maybe, borrowers and lenders) responding to the same issues and incentives in the same way in lock step didn’t create the very apparent credit bubble.