How Bubbly Housing Prices Helped Lift Startups

An abandoned home in Las Vegas Photograph by Spencer Platt/Getty Images

It’s hardly news that a lot of entrepreneurs borrowed against inflated home values to fund their businesses during the bubble of the past decade. Recent research sheds light on the link between housing prices and small businesses. Areas where home values jumped before the 2007-09 recession saw substantially bigger increases in the number of new businesses and employment by small companies, according to a working paper from the National Bureau of Economic Research. Larger companies in the same places didn’t have the same growth in payrolls.

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