Recommodification, Residualism, and Risk: The Political Economy of Housing Bubbles in Norway
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Over the last 25 years, Norway’s social democratic welfare state has experienced two housing market bubbles and one severe bust. Until recently Norwegian boom and bust movements have been even more exaggerated than the corresponding American cycles (see Figure 5.1). After peaking in August 2007, Norway’s housing market fell by 18% in real terms through 2008 (E24, 2009). The winter of 2008–09 saw stopgap measures aimed at breaking the fall brought on by the latest round of global and local housing market deflation. The state and Central Bank lowered interest rates to the levels that brought on the last boom, delivered fiscal stimulus, and offered the banks free swaps — MBS against treasury bills.
KeywordsInterest Rate Monetary Policy Housing Price Housing Market Real Interest Rate
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