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Growth, financial development, and housing booms

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  • Lim, Taejun

Abstract

We present a quantitative model to assess the effect of a housing boom on economic growth. In the model, a housing boom boosts economic growth through expanding homeowning entrepreneurs' borrowing capacities and mitigating capital misallocation, however, at different rates across different levels of financial development. Our analysis of 23 housing boom episodes in 54 countries from 1995 to 2012 corroborates the model's implication: economic growth during a housing boom is greater in countries with less developed financial systems.

Suggested Citation

  • Lim, Taejun, 2018. "Growth, financial development, and housing booms," Economic Modelling, Elsevier, vol. 69(C), pages 91-102.
    • Handle: RePEc:eee:ecmode:v:69:y:2018:i:c:p:91-102
    DOI: 10.1016/j.econmod.2017.09.008
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    Cited by:

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    4. Hichem Saidi, 2020. "Threshold effect of institutions on finance-growth nexus in MENA region: New evidence from panel simultaneous equation model," Economics Bulletin, AccessEcon, vol. 40(1), pages 699-715.
    5. Agne Setikiene & Mindaugas Butkus, 2021. "The Heterogeneous Impact of Financialisation on Economic Growth in the Long Run," JRFM, MDPI, vol. 14(5), pages 1-30, May.

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    More about this item

    Keywords

    Housing collateral; Economic growth; Financial development; Entrepreneurship;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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