Fred Harrison is one of the 12 only economists who predicted the current financial crisis. Here is an extract -
The British Fred Harrison in his first book, "The Power in the Land" (1983), forecast the recessions in the leading industrial economies in 1992. In 2005 he published Boom Bust, warning that the property market is subject to a sharp downturn at the end of a regular 18-year cycle, based on Harrison's study of UK property markets over the last 200 years. At a time when the consensus among forecasters was that the boom in house prices would cool to an annual 2 or 3% rise over the following years, Harrison analysed that a 'winner's curse' phase of the cycle would see UK home prices rise by more than 10% per annum - which they did over 2006 and 2007. An updated second edition of Boom Bust predicted that the next property market tipping point was due at end of 2007 or early 2008. The reason for the instability, Harrison explained, is not the housing market itself but the land market. Economic expansion encourages speculation, with banks lending more against escalating asset values and reinforcing the upward spiral. The only way land prices can be brought back to affordable levels is a slump or recession, undermining the banking system and causing widespread unemployment and repossessions. The UK housing market started collapsing in November 2007, followed by the recession Harrison had forecast.
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