ABSTRACT
This introduction presents an overview of key concepts covered in the subsequent chapters of this book. The chapter explains the US housing market. The bursting bubble in the US housing market was the point of departure of the current global financial crisis. It is certainly of great interest and importance to understand what forces drive the housing market and the recurrent boom-bust cycles that could be observed for the US housing market over the past decades. The chapter explains the specific nonlinear economic mechanism at work in the market for residential space which can explain the sudden reversal of a boom into a bust and vice versa. It explores feedback effects of nonlinear economic mechanism on the banking sector and the US macro economy. The chapter concludes that the pattern of boom-bust cycles in the housing market had been far from obsolete, and then struck back with a vengeance.
