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Asset market hangovers and economic growth: U.S. housing markets


Abstract: This paper presents evidence that speculative bubbles can have sizeable effects on house prices, and on housing investment. We infer that deviations of asset prices from fundamental values may have serious consequences for real activity, and explore some policy implications. The analysis relies on a panel of U.S. state-level data covering 1973-1996.

Keywords: Housing; Saving and investment; Economic development; Prices;

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Provider: Federal Reserve Bank of New York

Part of Series: Research Paper

Publication Date: 1998

Number: 9801