Introduction to Housing Bubble Problem | Calgary Real Estate - 0 views
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Another topic for discussion is how to prevent a housing bubble. Some economists argue that governments and central banks can and should take action to prevent bubbles; others say that they aren’t able to do so and that they can only clean up the mess after the bubble bursts.
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When the Bubble Bursts
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The immediate effect is the depletion of wealth resulting in a negative impact on household consumption. A decrease in demand destabilizes the banking system, and investors are unable to pay off their debts.
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