Housing Dynamics over the Business Cycle

Finn Kydland, Peter Rupert () and Roman Sustek

No 18432, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Over the U.S. business cycle, fluctuations in residential investment are well known to systematically lead GDP. These dynamics are documented here to be specific to the U.S. and Canada. In other developed economies residential investment is broadly coincident with GDP. Nonresidential investment has the opposite dynamics, being coincident with or lagging GDP. These observations are in sharp contrast with the properties of nearly all business cycle models with disaggregated investment. Including mortgages and interest rate dynamics aligns the theory more closely with U.S. observations. Longer time to build in housing construction makes residential investment coincident with output.

JEL-codes: E22 E32 R21 R31 (search for similar items in EconPapers)
Date: 2012-10
New Economics Papers: this item is included in nep-bec, nep-dge, nep-mac and nep-ure
Note: EFG ME
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (33)

Published as Finn E. Kydland & Peter Rupert & Roman Šustek, 2016. "HOUSING DYNAMICS OVER THE BUSINESS CYCLE," International Economic Review, vol 57(4), pages 1149-1177.

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Related works:
Working Paper: Housing Dynamics over the Business Cycle (2014)
Working Paper: Housing dynamics over the business cycle (2014)
Working Paper: Housing Dynamics over the Business Cycle (2012)
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