Does rental housing market stabilize the economy? A micro and macro perspective

Michał Rubaszek and Margarita Rubio

No 2017/06, Discussion Papers from University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM)

Abstract: The size of the rental housing market in most countries around the globe is low. In this article we claim that this may be detrimental for macroeconomic stability. Toward this aim we, determine the reasons behind rental market underdevelopment by conducting an original survey among a representative group of 1005 Poles, a country that is characterized by high homeownership ratio. We find that households' preferences are strongly influenced by economic and psychological factors. Next, we propose a DSGE model in which households satisfy housing needs both by owning and renting. We use it to show that reforms enhancing the rental housing market contribute to macroeconomic stability. This micro-macro approach allows us to dig into the causes of rental market underdevelopment and design appropriate policy recommendations.

Keywords: Rental housing market; survey data; DSGE model (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-dge, nep-eur, nep-mac and nep-ure
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Does the rental housing market stabilize the economy? A micro and macro perspective (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:not:notcfc:17/06

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