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The Sources of Fluctuations in Residential Investment: A View from a Policy-Oriented DSGE Model of the U.S. Economic

Listed author(s):
  • Michael T. Kiley

    (Federal Reserve Board)

  • Jean-Philippe Laforte

    (Federal Reserve Board)

  • Rochelle M. Edge

    (Federal Reserve Board)

This paper analyzes fluctuations in residential investment using an estimated DSGE model of the U.S. economy, which is current used to analyze policy questions and to produce forecasts on a regular basis. Importantly, the model is more detailed in its treatment of domestic spending and production decisions than most other models, allowing consideration of questions related to the housing sector and other macroeconomic developments. Our analysis examines the importance of various structural factors in determining the course of residential investment in the United States over the past two decades. We focus especially on developments in the last ten years, and examine in detail the relationship between monetary policy actions and residential investment within our model.

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File URL: https://economicdynamics.org/meetpapers/2008/paper_990.pdf
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Paper provided by Society for Economic Dynamics in its series 2008 Meeting Papers with number 990.

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Date of creation: 2008
Handle: RePEc:red:sed008:990
Contact details of provider: Postal:
Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA

Web page: http://www.EconomicDynamics.org/society.htm
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  6. Kydland, Finn E & Prescott, Edward C, 1982. "Time to Build and Aggregate Fluctuations," Econometrica, Econometric Society, vol. 50(6), pages 1345-1370, November.
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  11. Michael T. Kiley, 2010. "Habit Persistence, Nonseparability between Consumption and Leisure, or Rule-of-Thumb Consumers: Which Accounts for the Predictability of Consumption Growth?," The Review of Economics and Statistics, MIT Press, vol. 92(3), pages 679-683, August.
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  14. J. B. Taylor & M. Woodford (ed.), 1999. "Handbook of Macroeconomics," Handbook of Macroeconomics, Elsevier, edition 1, volume 1, number 1.
  15. Rochelle M. Edge & Michael T. Kiley & Jean-Philippe Laforte, 2009. "A Comparison Of Forecast Performance Between Federal Reserve Staff Forecasts, Simple Reduced-Form Models, And A Dsge Model," CAMA Working Papers 2009-03, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
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  17. Rudd, Jeremy & Whelan, Karl, 2005. "Does Labor's Share Drive Inflation?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 37(2), pages 297-312, April.
  18. Rochelle M. Edge & Michael T. Kiley & Jean-Philippe Laforte, 2007. "Documentation of the Research and Statistics Division’s estimated DSGE model of the U.S. economy: 2006 version," Finance and Economics Discussion Series 2007-53, Board of Governors of the Federal Reserve System (U.S.).
  19. Greenwood, J. & Hercowitz, Z. & Krusell, P., 1996. "Long-Run Implications of Investment-Specific Technological Change," RCER Working Papers 420, University of Rochester - Center for Economic Research (RCER).
  20. Rochelle M. Edge & Thomas Laubach & John C. Williams, 2003. "The responses of wages and prices to technology shocks," Finance and Economics Discussion Series 2003-65, Board of Governors of the Federal Reserve System (U.S.).
  21. Rochelle M. Edge & Michael T. Kiley & Jean-Philippe Laforte, 2005. "An estimated DSGE model of the US economy with an application to natural rate measures," Proceedings, Board of Governors of the Federal Reserve System (U.S.).
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