The Housing Cycle and Prospects for Technical Progress
Information technology has already transformed some areas of our lives, and has the prospect for transforming other sectors. This paper is about economic behaviors that anticipate technical progress, and how they may describe the housing price and construction boom of 2000-2006 and the bust thereafter. Specifically, I note that only a minority of housing output remains as an operating surplus for the structures' owners. It follows the prospect of productivity shocks to the mortgage and real estate industries have the potential to both move housing prices and non-residential consumption in the same direction, and that demand impulses are magnified in their effects on housing prices. A bust occurs when those impulses are realized later, or in a lesser magnitude, than originally anticipated. This view has testable implications for vacancy rates, net operating surplus, aggregate consumption patterns, net investment rates, and non-residential construction - all of which confirm the theory.
|Date of creation:||May 2010|
|Date of revision:|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Casey B. Mulligan & Luke Threinen, 2010. "The Marginal Products of Residential and Non-Residential Capital Through 2009," NBER Working Papers 15897, National Bureau of Economic Research, Inc.
- Willem H. Buiter, 2008.
"Housing Wealth Isn't Wealth,"
NBER Working Papers
14204, National Bureau of Economic Research, Inc.
- Buiter, Willem H., 2010. "Housing wealth isn't wealth," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 4, pages 1-29.
- Casey Mulligan & Luke Threinen, 2008. "Market Responses to the Panic of 2008," NBER Working Papers 14446, National Bureau of Economic Research, Inc.
- Casey B. Mulligan & Xavier Sala-i-Martin, 1991. "A Note on the Time-Elimination Method For Solving Recursive Dynamic Economic Models," NBER Technical Working Papers 0116, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:15971. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.