Misalignments in house prices and economic growth in Europe
comunitat-uji-handle:10234/9
comunitat-uji-handle2:10234/8643
comunitat-uji-handle3:10234/8644
comunitat-uji-handle4:
INVESTIGACIONMetadata
Title
Misalignments in house prices and economic growth in EuropeDate
2023Publisher
Taylor and FrancisISSN
0003-6846; 1466-4283Bibliographic citation
Juan Carlos Cuestas, Merike Kukk & Natalia Levenko (2022) Misalignments in house prices and economic growth in Europe, Applied Economics, 55:28, 3215-3237, DOI: 10.1080/00036846.2022.2110212Type
info:eu-repo/semantics/articlePublisher version
https://www.tandfonline.com/doi/abs/10.1080/00036846.2022.2110212Version
info:eu-repo/semantics/publishedVersionSubject
Abstract
In this paper we investigate house price misalignments and how they affect the real economy. We estimate the long-term relationship between house prices and the fundamentals that determine long-term house prices for ... [+]
In this paper we investigate house price misalignments and how they affect the real economy. We estimate the long-term relationship between house prices and the fundamentals that determine long-term house prices for a panel of European countries with dynamic OLS, using data from 2005–2018. We find that income has been the main driver of fundamental house prices in all countries, while the supply of dwellings has calmed the rise in house prices in some of them. We calculate house price misalignments, which are deviations of house prices from the fundamental value, and we employ them in the growth model. The results of the growth regression indicate that house price imbalances amplify business cycles in the short term, but in the long term house price overvaluations slow economic growth down. The findings imply that it is crucial to take measures to stabilize housing cycles. [-]
Description
This is an original manuscript of an article published by Taylor & Francis in Applied Economics on 01 Sep 2022, available at: https://doi.org/10.1080/00036846.2022.2110212
Is part of
Applied Economics, 55, 28, 2023Funder Name
Generalitat Valenciana
Project code
AICO2021/005
Rights
Copyright © Taylor & Francis Group
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info:eu-repo/semantics/openAccess
http://rightsstatements.org/vocab/CNE/1.0/
info:eu-repo/semantics/openAccess
This item appears in the folowing collection(s)
- ECO_Articles [696]