Abstract
The article explores the relationship between the dynamics of urban real estate markets and financial crises in the second half of the 19th century. This period was not only characterized by brisk urbanization, but also by the emergence of novel instruments to finance the developments of the large metropolises. We argue that basic elements of modern real estate crises can be found already during the 19th century: the inherent trend towards price bubbles, easy credit conditions which allowed the emergence of a subprime market, the close relation between real estate investments and the banking system, and an increasing importance of international finance. There are thus good reasons to compare the crises of 2008 with the financial crises of the late 19th century instead of taking the Great Depression of the 1930s as a yardstick.
Published Version
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