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Inferring Expectations from Observables: Evidence from the Housing Market / Itzhak Ben-David, Pascal Towbin, Sebastian Weber.
- Format:
- Book
- Author/Creator:
- Ben-David, Itzhak.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w25702.
- NBER working paper series no. w25702
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- Expectations During the U.S. Housing Boom
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2019.
- Summary:
- We propose a new method to identify shifts in price expectations in the housing market through the accumulation of excess capacity. Expectations of future price increases (due to anticipated future demand for housing services) cause the current supply to increase, creating a temporary vacancy. We implement this intuition in a structural vector autoregression with sign restrictions and explore the effects of price expectations in the U.S. housing market. We find that price expectation shocks were a prime factor explaining the 1996-2006 boom, particularly in the Sand States. Expectation shocks at the boom's peak reflected implausible growth expectations and reversed during the bust.
- Notes:
- Print version record
- March 2019.
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