IDEAS home Printed from https://ideas.repec.org/a/cje/issued/v22y1989i1p128-49.html
   My bibliography  Save this article

The Baby Boom, Housing and Loanable Funds

Author

Listed:
  • Joyce Manchester

Abstract

This paper examines baby boom effects in a simple three-period overlapping generations model in which equilibrium must be maintained in the housing market, as well as in the loanable funds market. All agents must buy a house financed by an adjustable-rate mortgage in the first period. Expectations regarding the path of interest rates and the price of housing play a crucial role in determining effects of the population bulge. Under static expectations, the rate of interest falls sharply at the appearance of the baby boom, while the price of housing increases. Behavior in the market for loanable funds explains this surprising result. When rational expectations are assumed, however, the rate of interest rises prior to, and during, the appearance of the baby boom and the price of housing increases as well. Welfare and long-term effects in the two scenarios do not differ markedly.

Suggested Citation

  • Joyce Manchester, 1989. "The Baby Boom, Housing and Loanable Funds," Canadian Journal of Economics, Canadian Economics Association, vol. 22(1), pages 128-149, February.
    • Handle: RePEc:cje:issued:v:22:y:1989:i:1:p:128-49
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0008-4085%28198902%2922%3A1%3C128%3ATBBHAL%3E2.0.CO%3B2-7
    Download Restriction: only available to JSTOR subscribers
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fratantoni, Michael & Schuh, Scott, 2003. "Monetary Policy, Housing, and Heterogeneous Regional Markets," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 35(4), pages 557-589, August.
    2. Marjorie Flavin & Takashi Yamashita, 1998. "Owner-Occupied Housing and the Composition of the Household Portfolio Over the Life-Cycle," NBER Working Papers 6389, National Bureau of Economic Research, Inc.
    3. Fortin, Mario & Leclerc, André, 2002. "Déterminants du prix réel des logements au Canada," L'Actualité Economique, Société Canadienne de Science Economique, vol. 78(3), pages 293-320, Septembre.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cje:issued:v:22:y:1989:i:1:p:128-49. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Prof. Werner Antweiler (email available below). General contact details of provider: https://edirc.repec.org/data/ceaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.