International interest rates, the current account and housing markets
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Título: | International interest rates, the current account and housing markets |
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Autor/es: | Franjo, Luis |
Grupo/s de investigación o GITE: | Análisis Económico |
Centro, Departamento o Servicio: | Universidad de Alicante. Departamento de Fundamentos del Análisis Económico |
Palabras clave: | Current account | Housing prices | Non-housing consumption | Homeownership | Collateralized borrowing constraints |
Área/s de conocimiento: | Fundamentos del Análisis Económico |
Fecha de publicación: | nov-2018 |
Editor: | Elsevier |
Cita bibliográfica: | Economic Modelling. 2018, 75: 268-280. doi:10.1016/j.econmod.2018.07.003 |
Resumen: | Current account deficits and housing prices showed a strong positive correlation throughout the mid-90s to 2007. This paper studies the effect of a decrease in the international interest rate and in the downpayment requirement to buy a house on the joint behavior of the current account and housing prices. To this end, I build an open economy model with life-cycle heterogeneous agents, tradable goods and housing. I calibrate the model to the U.S. economy and compute the transition after a decrease in the interest rate and in the downpayment. The model is able to match the boom and (qualitatively) the cooling down in the housing market without a reversal in the interest rate, the increase in the homeownership rate, the simultaneous boom followed by a decline in non-housing consumption, and the emergence of a negative net foreign asset position. |
Patrocinador/es: | Dirección General de Investigación Científica y Técnica, project ECO2010-20614. |
URI: | http://hdl.handle.net/10045/82154 |
ISSN: | 0264-9993 (Print) | 1873-6122 (Online) |
DOI: | 10.1016/j.econmod.2018.07.003 |
Idioma: | eng |
Tipo: | info:eu-repo/semantics/article |
Derechos: | © 2018 Elsevier B.V. |
Revisión científica: | si |
Versión del editor: | https://doi.org/10.1016/j.econmod.2018.07.003 |
Aparece en las colecciones: | INV - Análisis Económico - Artículos de Revistas |
Archivos en este ítem:
Archivo | Descripción | Tamaño | Formato | |
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2018_Franjo_EconomicModelling_final.pdf | Versión final (acceso restringido) | 1,51 MB | Adobe PDF | Abrir Solicitar una copia |
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