Demographic Cycle, Migration and Housing Investment: a Causal Examination

Eric Monnet and Clara Wolf

Working papers from Banque de France

Abstract: We study residential investment over GDP in 20 OECD countries since 1980, and show that it is closely associated with the growth dynamics of population aged 20-49. We develop a new method to uncover the causal effect of the growth of the 20-49 age group. Using past demographic data as an instrument to avoid potential endogeneity between migration and the housing cycle, we find that a 1% increase in the population aged 20-49 increases the residential investment rate by 1.3 pp. Demographic changes are a better predictor of the residential investment rate than any macroeconomic or financial variable we control for.

Keywords: business cycle; housing; demography; migration. (search for similar items in EconPapers)
JEL-codes: E32 J11 R21 (search for similar items in EconPapers)
Pages: 72 pages
Date: 2016
New Economics Papers: this item is included in nep-fdg, nep-lab, nep-mac and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:bfr:banfra:591

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