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Housing investment: What makes it so volatile? Theory and evidence from OECD countries

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  • Nguyen, Quoc Hung
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    Abstract

    This paper explains how mortgage market liberalization can introduce greater volatility in the housing market, which is a stylized fact documented from OECD countries, with a DSGE model where households face a credit constraint and housing is used as collateral. The housing collateral constraint creates a link between the housing market and borrowing capacity, a link that amplifies the response of housing demand to technology shocks and strengthens in economies with more liberalized mortgage markets.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Housing Economics.

    Volume (Year): 22 (2013)
    Issue (Month): 3 ()
    Pages: 163-178

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    Handle: RePEc:eee:jhouse:v:22:y:2013:i:3:p:163-178

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    Web page: http://www.elsevier.com/locate/inca/622881

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    Keywords: Housing investment; Collateral constraint; Mortgage markets;

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