Banking Integration and House Price Comovement

David Thesmar, Augustin Landier and David Sraer

No 9754, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: The correlation across US states in house price growth increased dramatically between 1976 and 2000. This paper shows that the contemporaneous geographic integration of the US banking market, via the emergence of large banks, was a primary driver of this phenomenon. To this end, we first theoretically derive an appropriate measure of banking integration across state pairs and document that house price growth correlation is strongly related to this measure of financial integration. Our IV estimates suggest that banking integration can explain up to one third of the rise in house price correlation over the period.

Keywords: Comovement; Financial integration; House prices (search for similar items in EconPapers)
JEL-codes: F36 G21 R30 (search for similar items in EconPapers)
Date: 2013-11
New Economics Papers: this item is included in nep-ban and nep-ure
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Banking integration and house price co-movement (2017)
Working Paper: Banking integration and house price comovement (2017)
Working Paper: Banking Integration and House Price Comovement (2014)
Working Paper: Banking Integration and House Price Comovement (2013)
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