Das House-Kapital: A Long Term Housing & Macro Model

Volker Grossman and Thomas Steger
Authors registered in the RePEc Author Service: Volker Grossmann

No 2017/080, IMF Working Papers from International Monetary Fund

Abstract: There are, by now, several long term, time series data sets on important housing & macro variables, such as land prices, house prices, and the housing wealth-to-income ratio. However, an appropriate theory that can be employed to think about such data and associated research questions has been lacking. We present a new housing & macro model that is designed specifically to analyze the long term. As an illustrative application, we demonstrate that the calibrated model replicates, with remarkable accuracy, the historical evolution of housing wealth (relative to income) after World War II and suggests a further considerable increase in the future. The model also accounts for the close connection of house prices to land prices in the data. We also compare our framework to the canonical housing & macro model, typically employed to analyze business cycles, and highlight the main differences.

Keywords: WP; real estate; Housing Wealth; Non-Residential Wealth; Wealth-to-Income Ratios; macro model; land price; housing stock; macro Model; services producer; Housing; Housing prices; Land prices; Stocks; Numéraire (search for similar items in EconPapers)
Pages: 82
Date: 2017-03-30
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Citations: View citations in EconPapers (11)

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