House prices and job losses

Gabor Pinter

No 569, Bank of England working papers from Bank of England

Abstract: What explains the strong comovement between house prices and job losses over the UK business cycle? To study this question, I build a general equilibrium model with collateral constraints, endogenous job separation and housing shocks, and confront it with macroeconomic data via Bayesian methods. The results suggest that shocks to house prices (i) explain about 10-20% of output fluctuations and about 20%–30% of fluctuations in unemployment and job separation rates via the collateral channel, and (ii) were a major cause in triggering the 1990 and 2008 recessions in the United Kingdom.

Keywords: Business cycle; house prices; financial frictions; labour market frictions. (search for similar items in EconPapers)
JEL-codes: E21 E27 E32 E44 (search for similar items in EconPapers)
Pages: 62 pages
Date: 2015-12-11
New Economics Papers: this item is included in nep-dge, nep-mac and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Related works:
Journal Article: House Prices and Job Losses (2019)
Working Paper: House Prices and Job Losses (2015)
Working Paper: House prices and job losses (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:boe:boeewp:0569

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