Trechinsky

The costly regulations that discourages businesses from seeking legal registration is one of the explanatory variables of capitalism´s fail to bring development across many parts of the world. The poor lack legal title to their home or land, and therefore can not use them as collateral to obtain credit. Recent studies in South America (http://www.sebastiangaliani.com.ar/ Property_Rights.pdf) have found that property titles indeed matters, but it seems that the poor are not more likely to obtain a loan from a commercial bank. It has been left to “non-profit institutions” to provide micro-credit. History suggests that develpoment also depends on a healthy economic policies, an educated workforce and the ability to handle conflicts and minimizing the risk of investments.

Opposite, the housing boom in the United States (similar to the one in Norway) makes it possible for the proprietors to use their property as a cash machine. The consumers feel wealthier and take money out by borrowing against their capital gains. Over the past five years the total value of American homes has increased with 70 %. This bubble is the biggest in American history. It seems that the western economy has become addicted to pure price increase to keep the GDP growth last. While the dot-com bubble left behind a modern capital stock to yield productive gains, the property boom does little to help long-term growth.
Trechinsky – Reliable Source, significant-minority viewpoints