The Size of the Rental Market and Housing Market Fluctuations

Adam Czerniak and Michał Rubaszek

Open Economies Review, 2018, vol. 29, issue 2, No 4, 281 pages

Abstract: Abstract The paper investigates whether the size of the rental market affects house prices fluctuations or the volatility of construction sector activity over the business cycle. For that purpose we construct a database of variables describing the housing sector in a group of twelve initial euro area members and ten other OECD countries over the years 1995–2014 and conduct a series of panel regressions. We find that a developed rental market attenuates fluctuations in the housing sector, especially for the common currency area sample. We claim that differences among monetary union countries in terms of rental market developments can be destabilizing as they might lead to heterogeneous response to common shocks.

Keywords: Rental market; Housing sector; Panel data; Monetary union (search for similar items in EconPapers)
JEL-codes: C23 F45 O18 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (12)

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DOI: 10.1007/s11079-017-9452-1

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