Trends and Cycles of Tech-Pole Housing Prices

Wensheng Kang
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Wensheng Kang: Kent State University-Tuscarawa

Journal of Economic Insight, 2009, vol. 35, issue 2, 61-79

Abstract: This paper examines the transmission mechanism of tech-pole housing prices and investigates the economic forces behind it. For this purpose, the work develops an MCMC algorithm to extract the latent common trend and cycle of the integrating prices and conduct Bayesian stochastic search for restriction selection of the panel data model. The evidence shows that the transmission magnitude and persistence depend importantly on the degree of IT-industry intensity between two metropolitan areas. While the common stochastic trend behind the price dynamics is primarily determined by normal income, the monetary policy is responsible for the common boom and bust of tech-pole housing cycles. The policy implication for the real asset pricing and risk hedging strategies are also discussed.

JEL-codes: C11 C32 E32 R31 (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:mve:journl:v:35:y:2009:i:2:p:61-79

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