Debt Dilution in 1920s America: Lighting the Fuse of a Mortgage Crisis

@article{PostelVinay2017DebtDI,
  title={Debt Dilution in 1920s America: Lighting the Fuse of a Mortgage Crisis},
  author={Natacha Postel-Vinay},
  journal={History of Economics eJournal},
  year={2017}
}
An explanation of the Great Depression based on mortgage debt via the banking channel has been downplayed due to the conservatism of mortgage contracts at the time. Indeed, maturities were particularly short compared to today's average terms (around three years), and loan-to-value ratios often did not exceed 50 per cent. Using newly-discovered archival documents and a newly-compiled dataset from 1934, this paper uncovers the darker side of 1920s U.S. mortgage lending: the so-called “second… Expand
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