The Implications of Speculative Behavior in the Housing Market

Feng, Xiao Hui

Student Work

The Implications of Speculative Behavior in the Housing Market

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By looking at the current economic situation, the paper will explore the chain of events that occurred and stories of Americans that suffered from the turmoil. And then, the paper will discuss Hyman P. Minsky's Financial Instability Hypothesis, and how it could have justified the current crisis. The paper will use a methodology named causal-loop diagram to justify the argument that the system of housing market was inherent to instability, and the presence of speculative behavior in the market had caused such instability to become more severe and destructive. At last, the paper will make suggestions on what methodology the U.S. policy makers can use in dealing with the system's instability

This report represents the work of one or more WPI undergraduate students submitted to the faculty as evidence of completion of a degree requirement. WPI routinely publishes these reports on its website without editorial or peer review.

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