Transmission Channels Linking Real Estate Shocks with Macroeconomic Performance: Evidence from Malaysia
This paper examines the transmission channels through which property markets propagate shocks to the real economy. Using a four-equation model which portrays the theoretical inter-linkages between real estate value and other components of the economy, our findings suggest that in the short run, negative real estate shocks affect GDP by dampening construction, bank lending activities and to a certain extent, consumption. The impact of shocks on investment is harder to decipher given the complicated dynamics arising from an almost instantaneous adjustment process towards equilibrium each time the system is perturbed. In the long run, there is no evidence of positive wealth effects on consumption while sustained depressions in property markets could be harmful to future economic growth.
|Date of creation:||Jun 2008|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +603 8924 8000
Fax: +603 8924 8002
Web page: http://www.nottingham.edu.my/nubs/Email:
More information through EDIRC
|Order Information:|| Email: |
When requesting a correction, please mention this item's handle: RePEc:nom:nubsmc:2008-09. 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: (Rasyad A. Parinduri)
If references are entirely missing, you can add them using this form.