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Interest Rates, House Prices, Fertility, and the Macroeconomy

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  • Ermanno Affuso

    (Department of Economics, Finance and Real Estate, University of South Alabama, Mobile, AL 36688, USA)

  • Khandokar Istiak

    (Department of Economics, Finance and Real Estate, University of South Alabama, Mobile, AL 36688, USA)

  • James Swofford

    (Department of Economics, Finance and Real Estate, University of South Alabama, Mobile, AL 36688, USA)

Abstract

This study differentiates between housing wealth and financial wealth and investigates whether changes in house prices and changes in interest rates have positive effects on the fertility rate. The study uses U.S. data between 1975–2020, a structural VAR model, and a Toda–Yamamoto causality test to perform the empirical investigation. The results show that changes in house prices and interest rates have a significant positive effect on changes in the fertility rate. The causality test finds that unidirectional causality exists between house prices and interest rates and fertility. The results indicate that children are consumer durable goods. The study predicts that a high fertility rate could be a by-product of an easy monetary policy through the channel of high house prices.

Suggested Citation

  • Ermanno Affuso & Khandokar Istiak & James Swofford, 2022. "Interest Rates, House Prices, Fertility, and the Macroeconomy," JRFM, MDPI, vol. 15(9), pages 1-17, September.
    • Handle: RePEc:gam:jjrfmx:v:15:y:2022:i:9:p:403-:d:911927
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    References listed on IDEAS

    as
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    Cited by:

    1. David Gray, 2023. "What Can District Migration Rates Tell Us about London’s Functional Urban Area?," JRFM, MDPI, vol. 16(2), pages 1-18, February.

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