Crashed: How a Decade of Financial Crises Changed the World

by Adam Tooze

but they account for a huge share of total marketable wealth worldwide. By one estimate, the share of American real estate in global wealth is as much as 20 percent.1 American homes account for 9 percent of the total. At the time of the crisis 70 percent of American households owned their own home—more than 80 million in total. Those same households were the greatest source of demand for the world economy. In 2007 American consumers bought c. 16 percent of global output, and nothing made them feel better than surging real estate prices. As America’s home prices almost doubled in the ten years leading to 2006, this raised household wealth by $6.5 trillion, delivering a giant boost not just to the United States but to the world economy.2 As US consumer spending surged toward $10 trillion, it added $937 billion to global demand between 2000 and 2007.3