"In the figure, the wealth effect—the extra spending you do when your assets appreciate, even if you don’t realize the gains—is scored at four cents on the dollar. That implies that if your home value goes up $50,000—no great shakes at all in the bubble years—you’ll spend an extra $2,000. And, sorry to say, visa versa, as the figure clearly reveals."
"Be aware that neither higher housing wealth, nor its wealth effect,
nor even the MEWs (mortgage equity withdrawals)
show up in the national income accounts"
" if you perfectly reasonably tried to go from income to spending,
you’d miss a large part of the action, both on the upside and the downside."
"And that downside really jumps out at you. "
" In the depths of the great recession,
the imploded housing bubble was snuffing out
almost 3 percentage points of GDP"
