Credit, House Prices and the Macroeconomy in Cyprus
Lena Cleanthous (),
Elena Eracleous and
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Elena Eracleous: University of Cyprus
No 2017-3, Working Papers from Central Bank of Cyprus
This paper examines the existence of a link between house prices, credit and macroeconomic conditions in Cyprus, using a vector error correction model (VECM) and quarterly data from 2005Q4 to 2016Q4. Overall, the results suggest that a link exists and that house prices have a bi-directional relationship with loans and the unemployment rate. Macroeconomic conditions matter for the Cyprus economy as an unexpected shock in unemployment is found to have a persistent impact on all the variables in the model. The interest rate is also found to have an effect on wages and house prices.
Keywords: credit; house prices; VECM; Cyprus (search for similar items in EconPapers)
JEL-codes: E44 E50 R20 (search for similar items in EconPapers)
Pages: 32 pages
New Economics Papers: this item is included in nep-mac and nep-ure
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Journal Article: Credit, House Prices and the Macroeconomy in Cyprus (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:cyb:wpaper:2017-3
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