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Housing and the Great Depression

  • Mehmet Balcilar

    ()

    (Department of Economics, Eastern Mediterranean University, Famagusta, North Cyprus,via Mersin 10, Turkey)

  • Rangan Gupta

    ()

    (Department of Economics, University of Pretoria)

  • Stephen M. Miller

    ()

    (College of Business, University of Las Vegas, Nevada)

This paper considers the role of the real housing price in the Great Depression. More specifically, we examine structural stability of the relationship between the real housing price and real GDP per capita. We test for structural change in parameter values, using a sample of annual US data from 1890 to 1952. The paper examines the long-run and short-run dynamic relationships between the real housing price and real GDP per capita to determine if these relationships experienced structural change over the sample period. We find that temporal Granger causality exists between these two variables only for sub-samples that include the Great Depression. For the other sub-sample periods as well as for the entire sample period no relationship exists between these variables.

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Paper provided by University of Pretoria, Department of Economics in its series Working Papers with number 201308.

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Length: 38 pages
Date of creation: Jan 2013
Date of revision:
Handle: RePEc:pre:wpaper:201308
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Web page: http://www.up.ac.za/economics

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