EconPapers    
Economics at your fingertips  
 

Housing market bubbles and business cycles in an agent-based credit economy

Einar Jon Erlingsson, Andrea Teglio, Silvano Cincotti (), Hlynur Stefansson, Jon Thor Sturlusson and Marco Raberto ()

Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), 2014, vol. 8, No 2014-8, 42 pages

Abstract: This paper investigates the housing and mortgage markets by means of an agent-based macroeconomic model of a credit network economy. A set of computational experiments have been carried out in order to explore the effects of different households' creditworthiness conditions required by banks in order to grant a mortgage. Results show that easier access to credit inflates housing prices, triggering a short run output expansion. However, the artificial economy becomes more unstable and prone to recessions. With stricter conditions the economy is more stable and does not fall into serious recessions, although a too severe regulation can slow down economic growth.

Keywords: Credit cycles; housing market; agent-based model; subprime lending (search for similar items in EconPapers)
JEL-codes: E20 E25 G21 R31 R38 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19) Track citations by RSS feed

Downloads: (external link)
http://dx.doi.org/10.5018/economics-ejournal.ja.2014-8
https://www.econstor.eu/bitstream/10419/93133/1/779650697.pdf (application/pdf)

Related works:
Working Paper: Housing market bubbles and business cycles in an agent-based credit economy (2013) Downloads
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:zbw:ifweej:20148

Access Statistics for this article

Economics - The Open-Access, Open-Assessment E-Journal (2007-2020) is currently edited by Dennis J. Snower

More articles in Economics - The Open-Access, Open-Assessment E-Journal (2007-2020) from Kiel Institute for the World Economy (IfW) Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().

 
Page updated 2021-10-24
Handle: RePEc:zbw:ifweej:20148