8  Braun (1984) and Ball and Moffitt (2001) discuss the effect on inflation of a change in the rate of productivity growth. BIS Review 4/2005  5  discussed today) in both of these episodes the productivity surprise was to the upside rather than the downside.
Consequently, psychological factors contributed to the crisis spreading from a purely financial crisis to a full-blown economic crisis. This mechanism can also be observed in the housing market. Regular questionnaire surveys are conducted in Denmark as regards household expectations of house prices in the years ahead. There is a high correlation between household expectations and the actual development.