Was There a British House Price Bubble? Evidence from a Regional Panel
John Muellbauer () and
Anthony Murphy ()
No 5619, CEPR Discussion Papers from C.E.P.R. Discussion Papers
This paper investigates the bubbles hypothesis with a dynamic panel data model of British regional house prices between 1972 and 2003. The model consists of a system of inverted housing demand equations, incorporating spatial interactions and lags and relevant spatial parameter heterogeneity. The results are data consistent, with plausible long-run solutions and include a full range of explanatory variables. Novel features of the model include transaction cost effects influencing the speed of adjustment, and interaction effects between an index of credit availability and real and nominal interest rates. No evidence for a recent bubble is found.
Keywords: bubble; house prices; ripple effect (search for similar items in EconPapers)
JEL-codes: C51 E39 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-fmk, nep-geo, nep-mac and nep-ure
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Working Paper: WAS THERE A BRITISH HOUSE PRICE BUBBLE? EVIDENCE FROM A REGIONAL PANEL (2006)
Working Paper: Was There A British House Price Bubble? Evidence from a Regional Panel (2006)
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