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Booms and busts in housing markets: Determinants and implications

Listed author(s):
  • Agnello, Luca
  • Schuknecht, Ludger

This study looks at the characteristics and determinants of booms and busts in housing prices for a sample of eighteen industrialised countries over the period 1980-2007. From an historical perspective, we find that recent housing booms have been amongst the longest in the past four decades. Estimates of a Multinomial Probit model suggest that domestic credit and interest rates have a significant influence on the probability of booms and busts occurring. Moreover, international liquidity plays a significant role for the occurrence of housing booms and--in conjunction with banking crises--for busts. We also find that the deregulation of financial markets has strongly magnified the impact of the domestic financial sector on the occurrence of booms.

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Article provided by Elsevier in its journal Journal of Housing Economics.

Volume (Year): 20 (2011)
Issue (Month): 3 (September)
Pages: 171-190

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Handle: RePEc:eee:jhouse:v:20:y:2011:i:3:p:171-190
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622881

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