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Housing Wealth and Aggregate Consumption in Sweden

Listed author(s):
  • Chen, Jie

    ()

    (The Institute for Housing and Urban Research, Uppsala University)

Registered author(s):

This paper extends the VECM cointegration model and PT (permanent-transitory) variance decomposition framework proposed by Lettau & Ludvigson (2004) and applies them on the Swedish data spanning from 1980q1 to 2004q4. There are strong statistical evidences that the movements of aggregate consumption, disposable income, housing wealth and financial wealth are tied together. However, it also suggests that the short run variations in the Swedish housing market are largely dissociated with consumer spending. Meanwhile, it is shown that the strength of the linkage between consumption and housing wealth is not sensitive to different model specifications and various measures of key variables.

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File URL: http://uu.diva-portal.org/smash/get/diva2:110706/FULLTEXT01.pdf
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Paper provided by Uppsala University, Department of Economics in its series Working Paper Series with number 2006:16.

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Length: 52 pages
Date of creation: 10 Jun 2006
Handle: RePEc:hhs:uunewp:2006_016
Contact details of provider: Postal:
Department of Economics, Uppsala University, P. O. Box 513, SE-751 20 Uppsala, Sweden

Phone: + 46 18 471 25 00
Fax: + 46 18 471 14 78
Web page: http://www.nek.uu.se/
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