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Housing cycles in the major euro area countries

Luis Alvarez, G. Bulligan, A. Cabrero, Laurent Ferrara () and Harald Stahl ()

Working papers from Banque de France

Abstract: The recent burst of the house price bubble in the United States and its spillover effects on real economies worldwide has rekindled the interest in the role of housing in the business cycle. In this paper, we investigate the relationships between housing cycles among the four major euro area countries (Germany, France, Italy and Spain) over the sample 1980q1 – 2008q4. Our main findings are that GDP cycles between 1.5 and 8 years show a high degree of comovement across these four countries, reflecting trade linkages. In contrast comovements in housing market cycles between 1.5 and 8 years are much weaker, idiosyncratic factors playing a major role. House prices are even less related across countries than quantities (residential investment, building permits, housing starts …). We find however much stronger relationships since 1999, i.e. in the common monetary policy period.

Keywords: Housing cycles; synchronisation measures; euro area countries. (search for similar items in EconPapers)
JEL-codes: E32 R21 R32 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:bfr:banfra:269

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