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International Macroeconomic Aspect of Housing

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  • Joe Cho Yiu Ng

    (City University of Hong Kong)

Abstract

This paper studies whether the relationships between housing prices and macroeconomic variables have changed after the 2008 Global Financial Criss (GFC). I re‐examine the business cycle correlations in 22 Organization for Economic Co‐ operation and Development (OECD) member countries. In general, macro variables exhibited a strong association with housing prices. While some correlations are weakened or strengthened, some are even reversed after the GFC. I also provide a literature review on why housing markets are essential for propagating shocks and related to business cycles.

Suggested Citation

  • Joe Cho Yiu Ng, 2021. "International Macroeconomic Aspect of Housing," GRU Working Paper Series GRU_2021_014, City University of Hong Kong, Department of Economics and Finance, Global Research Unit.
    • Handle: RePEc:cth:wpaper:gru_2021_014
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    File URL: https://www.cb.cityu.edu.hk/ef/doc/GRU/WPS/GRU%232021-014%20Ng.pdf
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    References listed on IDEAS

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    7. Leung, Charles Ka Yui, 2014. "Error correction dynamics of house prices: An equilibrium benchmark," Journal of Housing Economics, Elsevier, vol. 25(C), pages 75-95.
    8. Alejandro Justiniano & Giorgio E. Primiceri & Andrea Tambalotti, 2019. "Credit Supply and the Housing Boom," Journal of Political Economy, University of Chicago Press, vol. 127(3), pages 1317-1350.
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    13. Jin, Yi & Zeng, Zhixiong, 2004. "Residential investment and house prices in a multi-sector monetary business cycle model," Journal of Housing Economics, Elsevier, vol. 13(4), pages 268-286, December.
    14. John Geanakoplos, 2010. "Solving the present crisis and managing the leverage cycle," Economic Policy Review, Federal Reserve Bank of New York, vol. 16(Aug), pages 101-131.
    15. Chung Yi Tse & Charles Ka Yui Leung, 2002. "Increasing Wealth and Increasing Instability: The Role of Collateral," Review of International Economics, Wiley Blackwell, vol. 10(1), pages 45-52, February.
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    Cited by:

    1. Viana, Jr., Dante Baiardo C. & Lourenço, Isabel & Black, Ervin L. & Martins, Orleans Silva, 2023. "Macroeconomic instability, institutions, and earnings management: An analysis in developed and emerging market countries," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 51(C).
    2. Charles Ka Yui Leung & (single author only), 2021. "Handbook of Real Estate and Macroeconomics: An Introduction," ISER Discussion Paper 1137, Institute of Social and Economic Research, Osaka University.

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    More about this item

    Keywords

    Stylized facts; macro‐housing‐finance linkage; global financial crisis; business cycle frequency; housing market variables;
    All these keywords.

    JEL classification:

    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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