Winners and Losers in Housing Markets

Nobuhiro Kiyotaki, Alexander Michaelides and Kalin Nikolov

CDMA Conference Paper Series from Centre for Dynamic Macroeconomic Analysis

Abstract: This paper is a quantitatively-oriented theoretical study into the interaction between housing prices, aggregate production, and household behaviour over a lifetime. We develop a life-cycle model of a production economy in which land and capital are used to build residential and commercial structures. We find that, in an economy where the share of land in the value of structures is large, housing prices react more to an exogenous change in expected productivity or the world interest rate, causing large redistribution effects between net buyers and net sellers of houses. Changing the financing constraint, however, has limited effects on housing prices.

Keywords: Real estates; Land; Housing Prices; Life cycle; Collateral constraints. (search for similar items in EconPapers)
JEL-codes: E21 (search for similar items in EconPapers)
Date: 2007-11
New Economics Papers: this item is included in nep-bec, nep-mac and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (34)

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Related works:
Journal Article: Winners and Losers in Housing Markets (2011)
Journal Article: Winners and Losers in Housing Markets (2011)
Working Paper: Winners and Losers in Housing Markets (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:san:cdmacp:0705

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