EconPapers    
Economics at your fingertips  
 

House price convergence in euro zone and non-euro zone countries

I-Chun Tsai

Economic Systems, 2018, vol. 42, issue 2, 269-281

Abstract: This study investigates whether single currency use increased house price convergence among various countries. First, the panel unit root test results indicate that the house prices in euro zone countries were more correlated than the house prices in non-euro zone countries. Second, the house prices in various European countries converged towards the house prices in Germany, which uses the single currency, rather than towards those in the United Kingdom, indicating that single currency use increased the influence of the German housing market on other markets. Finally, the log t regression model, a new convergence test, was employed and determined that the house prices in various European countries were not converging before 1992 but began to do so after that year. After the euro was implemented as an official currency, the house prices in various countries converged towards a consistent level. On the basis of the relative transition paths, this study determines that the differences among housing markets in various countries have continuously decreased since 1992. The empirical results indicate that the law of one price is applicable to tradable goods and that single currency use can integrate housing markets, which include non-tradable goods.

Keywords: European housing market; Housing market integration; House price convergence; Maastricht Treaty (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0939362518301948
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecosys:v:42:y:2018:i:2:p:269-281

Access Statistics for this article

Economic Systems is currently edited by R. Frensch

More articles in Economic Systems from Elsevier Contact information at EDIRC.
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2019-10-14
Handle: RePEc:eee:ecosys:v:42:y:2018:i:2:p:269-281