Winners and Losers in Housing Markets

Nobuhiro Kiyotaki, Alexander Michaelides and Kalin Nikolov

No 7953, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper is a quantitatively-oriented theoretical study into the interaction between housing prices, aggregate production, and household behavior over a lifetime. We develop a life-cycle model of a production economy in which land and capital are used to build residential and commercial real estates. We find that, in an economy where the share of land in the value of real estates is large, housing prices react more to an exogenous change in expected productivity or the world interest rate, causing a large redistribution between net buyers and net sellers of houses. Changing financing constraints, however, has limited effects on housing prices.

Keywords: Collateral constraints.; Housing prices; Land; Life cycle; Real estate (search for similar items in EconPapers)
JEL-codes: E20 G10 R20 R30 (search for similar items in EconPapers)
Date: 2010-08
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Citations: View citations in EconPapers (66)

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Related works:
Journal Article: Winners and Losers in Housing Markets (2011)
Journal Article: Winners and Losers in Housing Markets (2011)
Working Paper: Winners and Losers in Housing Markets (2007)
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