Abstract Systemic risk must include the housing market, though economists have not generally focused on it. We begin construction of an agent-based model of the housing market with individual data from Washington, DC. Twenty years of success with agent-based models of mortgage prepayments give us hope that such a model could be useful. Preliminary analysis suggests that the housing boom and bust of 1997-2007 was due in large part to changes in leverage rather than interest rates.

Citation Geanakoplos, John, Robert Axtell, J. Doyne Farmer, Peter Howitt, Benjamin Conlee, Jonathan Goldstein, Matthew Hendrey, Nathan M. Palmer, and Chun-Yi Yang. 2012. "Getting at Systemic Risk via an Agent-Based Model of the Housing Market." American Economic Review , 102 (3): 53-58 . DOI: 10.1257/aer.102.3.53 Choose Format: BibTeX EndNote Refer/BibIX RIS Tab-Delimited