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(vasabii/Getty Images/iStockphoto)

How a housing correction could take consumers with it

Increasingly supported by recent data, prominent economics professors Atif Mian and Amir Sufi present a consumer debt-related theory of the financial crisis with potentially dire consequences for Canada’s economic future.

In their best-selling book, House of Debt, published in May, Princeton University’s Prof. Mian and the University of Chicago’s Prof. Sufi argued that the rapid growth of the U.S. economy before the financial crisis was caused by rising housing prices. As home prices climbed, consumer confidence and spending accelerated. When the housing bubble burst, consumer spending collapsed as well.