Institutional Affiliation: University of California at Santa Barbara
|Housing Dynamics over the Business Cycle|
with , : w18432
Over the U.S. business cycle, fluctuations in residential investment are well known to systematically lead GDP. These dynamics are documented here to be specific to the U.S. and Canada. In other developed economies residential investment is broadly coincident with GDP. Nonresidential investment has the opposite dynamics, being coincident with or lagging GDP. These observations are in sharp contrast with the properties of nearly all business cycle models with disaggregated investment. Including mortgages and interest rate dynamics aligns the theory more closely with U.S. observations. Longer time to build in housing construction makes residential investment coincident with output.
Published: Finn E. Kydland & Peter Rupert & Roman Šustek, 2016. "HOUSING DYNAMICS OVER THE BUSINESS CYCLE," International Economic Review, vol 57(4), pages 1149-1177. citation courtesy of
|The Business Cycle and the Life Cycle|
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in NBER Macroeconomics Annual 2004, Volume 19, Mark Gertler and Kenneth Rogoff, editors