Search Results
Working Paper
What drives housing dynamics in China? a sign restrictions VAR approach
We study housing dynamics in China using vector autoregressions identified with theoryconsistent sign restrictions. We study five potential drivers: 1) Population increases; 2) a relaxation of credit standards, for example, due to the shadow banking system; 3) increasing preferences towards housing, for example, due to a housing bubble or housing being a status asset to be competitive in the marriage market; 4) an increase in the savings rate; and 5) expected productivity progress. Our results show that fundamental shocks (population, credit and productivity) play a major role in the dynamics ...
Working Paper
Housing demands, savings gluts and current account dynamics
This paper studies the role of housing markets in explaining recent current account dynamics. I document a strong negative correlation, both across and within countries, between housing and current account dynamics. Then, in a quantitative two-country model without exchange rate driven expenditure switching, I analyze savings glut shocks and three drivers of housing demand (population, loan-to-value and housing price expectations) for which I input their dynamics observed in the OECD economies since the mid 1990s. Housing drivers alone imply counterfactual interest rate dynamics. Savings glut ...
Working Paper
Investors and Housing Affordability
This paper studies the impact of a new class of investors on the dynamics of U.S. housing affordability after the Financial Crisis. Using a novel instrumental variable and processing 85 million housing transactions, we find that investors purchases increase the price-to-income ratio, especially in the bottom price-tier, the entry point for first-time buyers. Investors cause a short-run reduction in the vacancy rate of owner-occupied units and a medium-run positive response of construction. These equilibrium responses mitigate the effect on affordability. The effects on price-to-income and ...