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Property Markets and Policies in an Intertemporal General Equilibrium Model

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  • K K Tang

Abstract

This paper presents a theoretical simulation model to examine the interaction between property markets and the rest of the economy. The model is a rational expectation, intertemporal general equilibrium model, with multiple sectors and real estate markets. The model emphasizes the interdependence between sectors as well as the government’s role in the property markets. It is demonstrated that a resource boom in a durable nontradable sector can improve the current account balance of the home economy in the short run. Secondly, when there is production interdependency between sectors, resource booms in one sector does not necessarily cause contraction in other sectors.

Suggested Citation

  • K K Tang, 1998. "Property Markets and Policies in an Intertemporal General Equilibrium Model," Departmental Working Papers 1999-01, The Australian National University, Arndt-Corden Department of Economics, revised Jan 1999.
  • Handle: RePEc:pas:papers:1999-01
    Note: Length (pages): 36 pages
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    File URL: https://crawford.anu.edu.au/acde/publications/publish/papers/wp1999/Tang%201999.01.pdf
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    References listed on IDEAS

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    1. Sergio Rebelo, 1997. "What Happens When Countries Peg Their Exchange Rates? (The Real Side of Monetary Reforms)," NBER Working Papers 6168, National Bureau of Economic Research, Inc.
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    3. Oskar R. Harmon & Michael J. Potepan, 1988. "Housing Adjustment Costs: Their Impact on Mobility and Housing Demand Elasticities," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 16(4), pages 459-478.
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    6. W. E. G. Salter, 1959. "Internal And External Balance: The Role Op Price And Expenditure Effects," The Economic Record, The Economic Society of Australia, vol. 35(71), pages 226-238, August.
    7. Friedman, Joseph H. & Weinberg, Daniel H., 1982. "The Economics of Housing Vouchers," Elsevier Monographs, Elsevier, edition 1, number 9780122683602, August.
    8. Corden, W Max & Neary, J Peter, 1982. "Booming Sector and De-Industrialisation in a Small Open Economy," Economic Journal, Royal Economic Society, vol. 92(368), pages 825-848, December.
    9. Okumura, Tsunao, 1997. "Housing Investment and Residential Land Supply in Japan: An Asset Market Approach," Journal of the Japanese and International Economies, Elsevier, vol. 11(1), pages 27-54, March.
    10. Warwick J. McKibbin, 1987. "Numerical Solution of Rational Expectations Models With and Without Strategic Behaviour," RBA Research Discussion Papers rdp8706, Reserve Bank of Australia.
    11. Robert E. Lucas & Jr., 1967. "Adjustment Costs and the Theory of Supply," Journal of Political Economy, University of Chicago Press, vol. 75, pages 321-321.
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