Hintermaier, ThomasThomasHintermaierKoeniger, WinfriedWinfriedKoeniger2023-04-132023-04-132016-01-09https://www.alexandria.unisg.ch/handle/20.500.14171/104755Crises of confidence turn booms into busts. Bloated household balance sheets and high debt offer the right ingredients for a confidence-driven housing bust. This column develops an analytic framework that accommodates the potential role of confidence fluctuations as a source of uncertainty in the economy. Current debt levels are shown to determine the exposure to crises of confidence. The results point to a clear role for macroprudential policy in the prevention of such crises.enCrises of confidencehousehold debt