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Changing supply elasticities and regional housing booms

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Listed:
  • Knut Are Aastveit

  • Bruno Albuquerque

  • Andr Anundsen

Abstract

Recent developments in US house prices mirror those of the 1996-2006 boom, but the recovery in construction activity has been weak. Using data for 254 US metropolitan areas, we show that housing supply elasticities have fallen markedly in recent years. Consistent with this, we ?nd that monetary policy shocks have a stronger e?ect on house prices during the recent recovery than the previous boom. At the same time, building permits respond less. Finally, we ?nd that housing supply elasticities have declined more in areas where land-use regulation has tightened the most, and in areas that experienced the sharpest housing busts.

Suggested Citation

  • Knut Are Aastveit & Bruno Albuquerque & Andr Anundsen, 2019. "Changing supply elasticities and regional housing booms," Working Papers No 04/2019, Centre for Applied Macro- and Petroleum economics (CAMP), BI Norwegian Business School.
    • Handle: RePEc:bny:wpaper:0076
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    File URL: http://hdl.handle.net/11250/2601599
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    References listed on IDEAS

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