Peak China Housing / Kenneth S. Rogoff, Yuanchen Yang.

Format:

Book

Author/Creator:

Rogoff, Kenneth S.

Contributor:

National Bureau of Economic Research.

Yang, Yuanchen.

Series:

Working Paper Series (National Bureau of Economic Research) no. w27697.

NBER working paper series no. w27697

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2020.

Summary:

China's real estate has been a key engine of its sustained economic expansion. This paper argues, however, that even before the Covid-19 shock, a decades-long housing boom had given rise to severe price misalignments and regional supply-demand mismatches, making an adjustment both necessary and inevitable. We make use of newly available and updated data sources to analyze supply-demand conditions in the fast-moving Chinese economy. The imbalances are then compared to benchmarks from other economies. We conclude that the sector is quite vulnerable to a sustained aggregate growth shock, such as Covid-19 might pose. In our baseline calibration, using input-output tables and taking account of the very large footprint of housing construction and real-estate related sectors, the adjustment to a decline in housing activity can easily trim a cumulative 5-10 percent from the level of output (over a period of years).

Notes:

Print version record

August 2020.