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Dynamic Modelling of the Building Cycle: 2. Empirical Results

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  • R Barras
  • D Ferguson

Abstract

This paper is a presentation of the results of the third stage of a project designed to investigate the incidence and causes of postwar building cycles in the British economy. In the first stage spectral analysis was used to identify the main postwar cycles in each sector of building (industrial, commercial, and residential); the second stage involved the development of a theoretical framework suitable for dynamic modelling of these cycles; and the third stage was concerned with estimating the best time-series model for each cycle. The estimated models demonstrate the presence of both an endogenous supply-side mechanism creating major building cycles of up to nine years' duration, and the exogenous influence of business-cycle fluctuations within user and investment submarkets which are transmitted via the demand for property into short building cycles of four to five years duration. In addition, the models demonstrate how the building cycle in each sector may be influenced by other factors, such as development costs and property rents and values.

Suggested Citation

  • R Barras & D Ferguson, 1987. "Dynamic Modelling of the Building Cycle: 2. Empirical Results," Environment and Planning A, , vol. 19(4), pages 493-520, April.
    • Handle: RePEc:sae:envira:v:19:y:1987:i:4:p:493-520
    DOI: 10.1068/a190493
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    References listed on IDEAS

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    1. Currie, David A, 1981. "Some Long Run Features of Dynamic Time Series Models," Economic Journal, Royal Economic Society, vol. 91(363), pages 704-715, September.
    2. Davidson, James E H, et al, 1978. "Econometric Modelling of the Aggregate Time-Series Relationship between Consumers' Expenditure and Income in the United Kingdom," Economic Journal, Royal Economic Society, vol. 88(352), pages 661-692, December.
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    Cited by:

    1. Tony McGough & Sotiris Tsolacos, 1999. "Interactions within the Office Market Cycle in Great Britain," Journal of Real Estate Research, American Real Estate Society, vol. 18(1), pages 219-232.
    2. Robert Thompson & Sotiris Tsolacos, 2000. "Projections in the Industrial Property Market using a Simultaneous Equation System," Journal of Real Estate Research, American Real Estate Society, vol. 19(2), pages 165-188.
    3. Yannis Hatzikian & Eleftherios Bampasis, 2017. "Exploring the Relationship of Innovation Intensity, Knowledge Production and Productivity in Greek SMEs Before the Eruption of Debt Crisis," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 8(1), pages 294-318, March.
    4. Sotiris Tsolacos & Tony McGough, 1999. "Rational Expectations, Uncertainty and Cyclical Activity in the British Office Market," Urban Studies, Urban Studies Journal Limited, vol. 36(7), pages 1137-1149, June.
    5. John Henneberry & Tony McGough & Fotis Mouzakis, 2005. "The Impact of Planning on Local Business Rents," Urban Studies, Urban Studies Journal Limited, vol. 42(3), pages 471-502, March.
    6. S Tsolacos & G Keogh & T McGough, 1998. "Modelling Use, Investment, and Development in the British Office Market," Environment and Planning A, , vol. 30(8), pages 1409-1427, August.
    7. Yanfang Sun & Haiyan Xie & Xirong Niu, 2019. "Characteristics of Cyclical Fluctuations in the Development of the Chinese Construction Industry," Sustainability, MDPI, vol. 11(17), pages 1-14, August.
    8. Geoffrey Meen & Kenneth Gibb & Daniel Mackay & Michael White, 2001. "On The Interrelationship Between Housing and Industrial Construction," ERES eres2001_232, European Real Estate Society (ERES).
    9. A J McGough & S Tsolacos, 1997. "The Stylised Facts of the UK Commercial Building Cycles," Environment and Planning A, , vol. 29(3), pages 485-500, March.
    10. J Coakley, 1994. "The Integration of Property and Financial Markets," Environment and Planning A, , vol. 26(5), pages 697-713, May.
    11. Sotiris Tsolacos, 1999. "Retail Building Cycles: Evidence from Great Britain," Journal of Real Estate Research, American Real Estate Society, vol. 18(1), pages 197-218.

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