Housing Construction Cycles and Interest Rates

Laura Berger-Thomson and Luci Ellis
Additional contact information
Laura Berger-Thomson: Reserve Bank of Australia

RBA Research Discussion Papers from Reserve Bank of Australia

Abstract: Housing investment is one of the most cyclical components of GDP. Much of that cyclicality stems from the sector’s sensitivity to interest rates, but it is also possible that construction lags generate intrinsic cyclicality in this sector. Although the housing sector is generally considered to be more interest-sensitive than the economy as a whole, the degree of this sensitivity seems to vary between countries and through time. In this paper, we model the housing markets in Australia, the United States, the United Kingdom and Canada using a structural three-stage least-squares system. We document the variations in the housing sector’s cyclicality and sensitivity to movements in interest rates, and attempt to determine the underlying causes of these differences.

Keywords: cycles; housing construction; interest rates (search for similar items in EconPapers)
JEL-codes: E22 E32 R21 R31 (search for similar items in EconPapers)
Date: 2004-10
New Economics Papers: this item is included in nep-bec, nep-geo and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

Downloads: (external link)
https://www.rba.gov.au/publications/rdp/2004/pdf/rdp2004-08.pdf (application/pdf)

Related works:
Working Paper: Housing Construction Cycles and Interest Rates (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rba:rbardp:rdp2004-08

Access Statistics for this paper

More papers in RBA Research Discussion Papers from Reserve Bank of Australia Contact information at EDIRC.
Bibliographic data for series maintained by Paula Drew ().