(C) Center for Economic and Policy Research
This unaltered story was originally published on CEPR.NET
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Is the United States in Another Housing Bubble? - The New York Times [1]

['Paul Krugman']

Date: 2022-01-28 00:00:00

Do you remember the housing bubble? OK, if you’re 35 or younger, probably not — you were a teenager at the most when the bubble burst. But it was a huge deal at the time, and a very strange one.

When the bubble was inflating in the early 2000s, it seemed to me and others — Dean Baker may have been the first prominent economist to sound the alarm — to be the most obvious case of mispricing we’d ever seen. At least the dot-com bubble of the late 1990s had the excuse that businesses were developing exciting new technology, so at least some of the new companies might end up becoming extremely valuable. But people have been building houses for thousands of years; what could justify those extraordinary prices?

At the time, however, anyone raising questions about housing was treated like … people who now raise questions about cryptocurrencies. (After yesterday’s column went online, a Wall Streeter friend texted “God help your inbox.”) I got a lot of “You only say there’s a bubble because you hate President Bush” emails.

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[1] Url: https://www.nytimes.com/2022/01/28/opinion/housing-bubble-us.html

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