Global Finance, Labor Politics, and the Political Economy of Housing Prices

Alison Johnston and Aidan Regan
Additional contact information
Alison Johnston: Oregon State University
Aidan Regan: University College Dublin

Politics & Society, 2017, vol. 45, issue 3, 327-358

Abstract: International political economy identifies declining nominal interest rates, securitization, and financial liberalization as drivers of rising housing prices. Despite witnessing these common credit shocks, however, developed economies experienced divergent trends in housing inflation since the 1980s. We offer a comparative political economy explanation of variation in house prices, arguing that by restraining household incomes, wage-setting institutions can blunt financial liberalization’s inflationary impact on housing markets. Employing quantitative analysis and a comparative study of Ireland and the Netherlands, we uncover two findings. First, countries where political coalitions in the export sector held veto powers over those in the nontraded sector in national wage setting realized lower housing inflation. Second, the impact of sectoral coalitions on housing prices in OECD countries is similar to that of financial variables. Our results suggest that the organization of labor politics continues to play an important role in mitigating the destabilizing effects of global finance on developed economies.

Keywords: housing prices; labor politics; growth models; international political economy; comparative political economy (search for similar items in EconPapers)
Date: 2017
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/0032329217702102 (text/html)

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:sae:polsoc:v:45:y:2017:i:3:p:327-358

DOI: 10.1177/0032329217702102

Access Statistics for this article

More articles in Politics & Society
Bibliographic data for series maintained by SAGE Publications ().