Manufacturing Decline and House Price Volatility

Isaiah Hull, Conny Olovsson, Karl Walentin and Andreas Westermark

No 349, Working Paper Series from Sveriges Riksbank (Central Bank of Sweden)

Abstract: Using a unique dataset of all Swedish housing transactions over the 2009-2017 period, we find that an increase in manufacturing's share of employment is positively associated with house price growth volatility and negatively associated with risk-adjusted housing returns. Both effects appear to be related to manufacturing's impact on firm concentration and employment volatility. Moreover, as we demonstrate in an application, our results have implications for portfolio choice. They also suggest that the manufacturing decline since 1970 could account for a 32% reduction in house price volatility in Sweden, and similar reductions in the U.S., U.K., and Japan.

Keywords: House Prices; Portfolio Choice; Manufacturing; Volatility (search for similar items in EconPapers)
JEL-codes: E30 O14 R20 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2017-12-01, Revised 2019-07-01
New Economics Papers: this item is included in nep-mac and nep-ure
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Journal Article: Manufacturing Decline and House Price Volatility (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:rbnkwp:0349

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