Das House-Kapital : A Long Term Housing & Macro Model

Author/Editor:

Volker Grossman ; Thomas Steger

Publication Date:

March 30, 2017

Electronic Access:

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Summary:

There are, by now, several long term, time series data sets on important housing & macro variables, such as land prices, house prices, and the housing wealth-to-income ratio. However, an appropriate theory that can be employed to think about such data and associated research questions has been lacking. We present a new housing & macro model that is designed specifically to analyze the long term. As an illustrative application, we demonstrate that the calibrated model replicates, with remarkable accuracy, the historical evolution of housing wealth (relative to income) after World War II and suggests a further considerable increase in the future. The model also accounts for the close connection of house prices to land prices in the data. We also compare our framework to the canonical housing & macro model, typically employed to analyze business cycles, and highlight the main differences.

Series:

Working Paper No. 17/80

Subject:

English

Publication Date:

March 30, 2017

ISBN/ISSN:

9781475590302/1018-5941

Stock No:

WPIEA2017080

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

82

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