Global Housing Cycles

August 1, 2012

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Housing cycles and their impact on the financial system and the macroeconomy have become the center of attention following the global financial crisis. This paper documents the characteristics of housing cycles in a large set of countries, and examines the determinants of house price movements. Empirical analysis shows that house price dynamics are mostly driven by income and demographics but fluctuations in these fundamentals and credit conditions can create deviations from the implied equilibrium path. We conclude with a discussion of the macroeconomic implications of house price corrections.

Subject: Asset prices, Financial institutions, Housing, Housing prices, Income, Mortgages, National accounts, Prices

Keywords: Asset prices, correlation coefficient, credit market, cycle characteristic, economic activity, equilibrium price, Global, Housing, housing cycle, Housing Cycles, Housing prices, Income, last quarter, monetary policy, Mortgage Markets, Mortgages, regression analysis, standard deviation, WP

Pages:
56
Volume:
2012
DOI:
https://doi.org/10.5089/9781475505672.001
Issue:
217
Series:
Working Paper No. 2012/217
Stock No:
WPIEA2012217
ISBN:
9781475505672
ISSN:
1018-5941

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