Blog post from London School of Economics & Political Science
Abstract
The effects of the subprime mortgage crisis which began in 2007 are still being felt today, with the U.S. now only slowly returning to pre-crisis growth levels. Richard Avramenko and Richard Boyd write that our society is based on what they term ‘subprime virtues’, such as moderation, truth-telling, frugality and commitment, and that federal housing policy in the lead up to the crisis encouraged nearly the opposite behavior. They argue that modest reforms towards better housing policies, such as mortgage tax credits and stricter penalties for mortgage fraud would go some way towards fostering society’s ‘subprime virtues’
