Housing Dynamics over the Business Cycle / Finn E. Kydland, Peter Rupert, Roman Sustek.

Format:

Book

Author/Creator:

Kydland, Finn E.

Contributor:

National Bureau of Economic Research.

Rupert, Peter.

Sustek, Roman.

Series:

Working Paper Series (National Bureau of Economic Research) no. w18432.

NBER working paper series no. w18432

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2012.

Summary:

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.

Notes:

Print version record

October 2012.