How do housing bubbles affect other economic sectors? We show that in the presence of collateral constraints, a bubble … initially raises housing credit demand and crowds out credit to non-housing firms. If the bubble lasts, however, housing credit … repayments raise banks' net worth and expand credit supply, so that crowding-out eventually gives way to crowding-in. This is …

access to a bank loan or a credit line. In developed countries, the average percentage is 95%. Loan collateral requirements … the three financial frictions (cost of participation in the credit market, borrowing limit or cost of monitoring) is the … reduction in the cost of participation in the credit market (which increases financial access to the level of developed …