Asad Zaman — Why does Aggregate Demand Collapse?

Summary of Atif Mian and Amir Sufi's House of Debt. It attributes the decline in aggregate demand to the collapse of assets held by the middle class, which led to their greatly increasing saving desire and consequent demand leakage. The summary omits stagnant wages along with increase in household debt, however, which also contributed to demand leakage as a result of the crisis and subsequent economic contraction. 

This was a crisis in the making over several decades as productivity gains were distributed chiefly to capital and top earners and workers — the 99% — borrowed more to maintain lifestyle. This was supported by increasing middle class asset values. When asset value crashed, a "balance sheet recession" ensued from which the middle class is still trying to recover.

Real-World Economics Review Blog
Why does Aggregate Demand Collapse?
Asad Zaman