Housing Investment and the U.S. Economy: How Have the Relationships Changed?
AbstractPrevious research has found that housing investment has a disproportionate role in the U.S. business cycle. This paper demonstrates that the relationship between housing and the rest of the economy has changed since financial deregulation and innovation in the early1980s. In particular, residential investment increases both consumption, as well as non-residential investment palpably more than in years past. Additionally, in the pre-deregulation years, non-residential investment appeared to crowd out housing activity. However, the results indicate that this effect is smaller in the present era than before the early 1980s, in all likelihood due to the switch from thrift-based financing of home mortgages to the current system in which secondary mortgage markets play a predominant role.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by American Real Estate Society in its journal journal of Real Estate Research.
Volume (Year): 31 (2009)
Issue (Month): 3 ()
Contact details of provider:
Postal: American Real Estate Society Clemson University School of Business & Behavioral Science Department of Finance 401 Sirrine Hall Clemson, SC 29634-1323
Web page: http://www.aresnet.org/
Postal: Diane Quarles American Real Estate Society Manager of Member Services Clemson University Box 341323 Clemson, SC 29634-1323
Find related papers by JEL classification:
- L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Cheung, Yin-Wong & Lai, Kon S, 1993. "Finite-Sample Sizes of Johansen's Likelihood Ration Tests for Conintegration," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 55(3), pages 313-28, August.
- Paul R. Goebel & Christopher K. Ma, 1993. "The Integration of Mortgage Markets and Capital Markets," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 21(4), pages 511-538.
- Bradley, Michael G & Gabriel, Stuart A & Wohar, Mark E, 1995. "The Thrift Crisis, Mortgage-Credit Intermediation, and Housing Activity," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 27(2), pages 476-97, May.
- G. William Schwert, 1988.
"Tests For Unit Roots: A Monte Carlo Investigation,"
NBER Technical Working Papers
0073, National Bureau of Economic Research, Inc.
- Schwert, G William, 1989. "Tests for Unit Roots: A Monte Carlo Investigation," Journal of Business & Economic Statistics, American Statistical Association, vol. 7(2), pages 147-59, April.
- Schwert, G William, 2002. "Tests for Unit Roots: A Monte Carlo Investigation," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(1), pages 5-17, January.
- Richard K. Green, 1997.
"Follow the Leader: How Changes in Residential and Non-residential Investment Predict Changes in GDP,"
Real Estate Economics,
American Real Estate and Urban Economics Association, vol. 25(2), pages 253-270.
- Richard K. Green, 1996. "Follow the Leader: How Changes In Residential and Non-Residential Investment Predict Changes in GDP," Wisconsin-Madison CULER working papers 96-05, University of Wisconsin Center for Urban Land Economic Research.
- Stephen A. Pyhrr & Stephen E. Roulac & Waldo L. Born, 1999. "Real Estate Cycles and Their Strategic Implications for Investors and Portfolio Managers in the Global Economy," Journal of Real Estate Research, American Real Estate Society, vol. 18(1), pages 7-68.
- N. Edward Coulson & Myeong-Soo Kim, 2000. "Residential Investment, Non-residential Investment and GDP," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 28(2), pages 233-247.
- Andrews, Donald W K & Ploberger, Werner, 1994.
"Optimal Tests When a Nuisance Parameter Is Present Only under the Alternative,"
Econometric Society, vol. 62(6), pages 1383-1414, November.
- Tom Doan, . "APGRADIENTTEST: RATS procedure to perform Andrews-Ploberger Structural Break Test for GARCH/Maximum Likelihood," Statistical Software Components RTS00007, Boston College Department of Economics.
- Tom Doan, . "APBREAKTEST: RATS procedure to implement Andrews-Ploberger Structural Break Test," Statistical Software Components RTS00006, Boston College Department of Economics.
- Donald W.K. Andrews & Werner Ploberger, 1992. "Optimal Tests When a Nuisance Parameter Is Present Only Under the Alternative," Cowles Foundation Discussion Papers 1015, Cowles Foundation for Research in Economics, Yale University.
- Tom Doan, . "REGHBREAK: RATS procedure to perform structural break test with bootstrapped p-values," Statistical Software Components RTS00176, Boston College Department of Economics.
- Edward E. Leamer, 2007.
"Housing is the business cycle,"
Proceedings - Economic Policy Symposium - Jackson Hole,
Federal Reserve Bank of Kansas City, pages 149-233.
- Dynan, Karen E. & Elmendorf, Douglas W. & Sichel, Daniel E., 2006.
"Can financial innovation help to explain the reduced volatility of economic activity?,"
Journal of Monetary Economics,
Elsevier, vol. 53(1), pages 123-150, January.
- Karen E. Dynan & Douglas W. Elmendorf & Daniel E. Sichel, 2005. "Can financial innovation help to explain the reduced volatility of economic activity?," Finance and Economics Discussion Series 2005-54, Board of Governors of the Federal Reserve System (U.S.).
- Edwin S. Mills, 1987. "Has the United States Overinvested in Housing?," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 15(1), pages 601-616.
- Ronald W. Kaiser, 1997. "The Long Cycle of Real Estate," Journal of Real Estate Research, American Real Estate Society, vol. 14(3), pages 233-258.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (JRER Graduate Assistant/Webmaster).
If references are entirely missing, you can add them using this form.