Space matters: Understanding the real effects of macroeconomic variations in cross-country housing price movements
Tapas Mishra () and
Economics Letters, 2018, vol. 163, issue C, 130-135
Changes in macroeconomic conditions can significantly determine directions and magnitudes of cross-country housing price movements. We demonstrate that such effects are consistently over-estimated when ‘spatial frictions’ are merely assumed, but are not explicitly modeled in the empirical framework. The extent of over-estimation bias has significant policy implications.
Keywords: Macroeconomic adjustments; Spatial frictions; International housing market; Estimation bias; Spatial panel data (search for similar items in EconPapers)
JEL-codes: C32 E60 E62 R31 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:163:y:2018:i:c:p:130-135
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