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

Author

Listed:
  • Michael T. Kiley

    (Federal Reserve Board)

  • Jean-Philippe Laforte

    (Federal Reserve Board)

  • Rochelle M. Edge

    (Federal Reserve Board)

Abstract

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.

Suggested Citation

  • Michael T. Kiley & Jean-Philippe Laforte & Rochelle M. Edge, 2008. "The Sources of Fluctuations in Residential Investment: A View from a Policy-Oriented DSGE Model of the U.S. Economic," 2008 Meeting Papers 990, Society for Economic Dynamics.
  • Handle: RePEc:red:sed008:990
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    References listed on IDEAS

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    Cited by:

    1. Goodness C. Aye & Stephen M. Miller & Rangan Gupta & Mehmet Balcilar, 2013. "Forecasting the US Real Private Residential Fixed Investment Using Large Number of Predictors," Working Papers 201348, University of Pretoria, Department of Economics.
    2. Michael Kiley & Jean-Philippe Laforte & Rochelle Edge, 2009. "Investment Shocks and the Business Cycle: The View from a Policy-Oriented DSGE model," 2009 Meeting Papers 148, Society for Economic Dynamics.
    3. Jane Dokko & Brian M. Doyle & Michael T. Kiley & Jinill Kim & Shane Sherlund & Jae Sim & Skander Van Den Heuvel, 2011. "Monetary policy and the global housing bubble," Economic Policy, CEPR;CES;MSH, vol. 26(66), pages 233-283, April.
    4. Kiley, Michael T., 2013. "Output gaps," Journal of Macroeconomics, Elsevier, vol. 37(C), pages 1-18.
    5. Michael T. Kiley, 2008. "Inflation expectations, uncertainty, the Phillips curve, and monetary policy - comments," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 53.
    6. Marco Ratto & Werner Roeger & Jan in 't Veld, 2010. "Using a DSGE model to look at the recent boom-bust cycle in the US," European Economy - Economic Papers 2008 - 2015 397, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    7. Naik, Prasad A., 2015. "Marketing Dynamics: A Primer on Estimation and Control," Foundations and Trends(R) in Marketing, now publishers, vol. 9(3), pages 175-266, December.
    8. Nombulelo Gumata, Alain Kabundi and Eliphas Ndou, 2013. "Important Channels of Transmission Monetary Policy Shock in South Africa," Working Papers 375, Economic Research Southern Africa.

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