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Growth, financial development, and housing booms

Taejun Lim

Economic Modelling, 2018, vol. 69, issue C, 91-102

Abstract: We present a quantitative model to assess the effect of a housing boom on economic growth. In the model, a housing boom boosts economic growth through expanding homeowning entrepreneurs' borrowing capacities and mitigating capital misallocation, however, at different rates across different levels of financial development. Our analysis of 23 housing boom episodes in 54 countries from 1995 to 2012 corroborates the model's implication: economic growth during a housing boom is greater in countries with less developed financial systems.

Keywords: Housing collateral; Economic growth; Financial development; Entrepreneurship (search for similar items in EconPapers)
JEL-codes: E44 G21 O11 O16 (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:eee:ecmode:v:69:y:2018:i:c:p:91-102