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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 ...