Bank credit and the housing market in OECD countries

Arestis, Philip; González, Ana Rosa

doi:10.2753/pke0160-3477360304

Cited by 9 publications

(5 citation statements)

References 42 publications

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“…Therefore, inflation can have a decisive impact on house prices. Results which are in consistency with (Arestis, P. and González, A.R. 2014).…”

Section: Estimates and Regression Analysissupporting

confidence: 89%

Impact of Macroeconomic Variables on Housing Prices in Saudi Arabia: A VAR Approach

Deea¹

2020

Preprint

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This paper examines how housing prices are determined by macroeconomic factors in Saudi Arabia, namely, Gross Domestic Product Per capita (GDPP), Consumer Prices Index (CPI), and Unemployment Rate (UNEMP). Quarterly data for a period (2014q1 – 2019q4) were collected from publications of Saudi Arabian Monetary Authority (SAMA). Vector Autoregression Analysis (VAR) is employed to capture the dynamic effect of the variables on housing prices. Granger Causality, Variance Decomposition and Impulse response function are also used. The results show that housing prices are insignificantly and positively related to GDPP, whereas it is negatively related to both (CPI & UNEMP). Only CPI has a significant relationship. The three variables, jointly, have Granger causality on HPI. Variance decompositions show that CPI is the variable with the highest explanatory power over the variation of housing prices, followed by GDPP and the UNEMP respectively indicating that CPI is the most influential determinants for housing prices.

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“…Therefore, inflation can have a decisive impact on house prices. Results which are in consistency with (Arestis, P. and González, A.R. 2014).…”

Section: Estimates and Regression Analysissupporting

confidence: 89%

Impact of Macroeconomic Variables on Housing Prices in Saudi Arabia: A VAR Approach

Deea¹

2020

Preprint

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“…According to the first of thought, inflation and house prices have a positive association (Sheiner, 1995; Newell, 1996; Apergis and Rezitis, 2003; Goetzmann and Valaitis, 2006; Hossain and Latif, 2009; Naji Meidani et al , 2011; Qui, 2011; Gou et al , 2015; Kuang and Liu, 2015). Contrarily, the second standpoint suggests a negative association between house prices and inflation (Bjørnland and Jacobsen, 2010; Arestis and González, 2014). Nonetheless, there is also a strand of literature, which shows no cointegrated relationship between inflation and housing prices (Li and Ge, 2008; Glascock et al , 2010; Christou et al , 2018).…”

Section: Literaturementioning

confidence: 99%

The relationship between housing prices and inflation rate in Turkey

Korkmaz

2019

IJHMA

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Purpose Human beings need shelter as the beginning of their existence. Same holds true for people who live in Turkey as it is a cultural and traditional reason to be the host and endeavor to buy a home even if one has to pay the debt for years. Another factor that is important for individuals and even for countries is the inflation rate. In this context, the purpose of this study is to investigate whether the 26 regions of Turkey are affected by the inflationary pressure, specifically in the housing price index (HPI). Design/methodology/approach For this purpose, data from 2010:01 to 2019:01 and the consumer price index (CPI), as well as HPI have been used. The causal relationship between the variables is analyzed by Konya Causality (2006) test. Findings The key results suggest that HPI causes inflationary pressures in some regions. Research limitations/implications The study has some limitations in terms of data set and scope. These are as follows: although there are many variables affecting housing prices, this study aims to investigate the causal link between inflation and housing prices. In addition, only the CPI and HPI variables were provided on a monthly basis in the 2010-2019 period for 26 regions due to the aim of making regional propositions in the investigation of this relationship. For these reasons, different macroeconomic variables could not be studied. Originality/value This study makes the following contribution to the literature. While the majority of existing literature investigates the relationship between housing prices and inflation from an empirical perspective for country, very few studies have been for the sub-regions and also these studies have focused on only some sub-regions. In other words, in the literature review, a study has observed that Turkey has to examine the relationship between the housing price and inflation variables for all sub-regions in particular. To overcome this deficiency in the literature, this study aims to investigate the relationship between housing price and inflation for 26 regions.

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“…The positive feedback loop between house prices and credit is well established (e.g. Arestis and González 2014). But still, given that most macro models fail to include the housing sector, even fewer model house price cycles, with some exceptions that are grounded in PKE, behavioural economics or heterogeneous agents modelling.…”

Section: Models Of House Price Cyclesmentioning

confidence: 99%

Building blocks for the macroeconomics and political economy of housing

Stockhammer¹,

Wolf²

2022

Money, Finance, and Capitalist Crisis

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Housing has played an essential part in the global financial crisis 2007-08 and the Euro crisis. Large parts of bank lending go to mortgages. Housing wealth is the largest part of wealth for most households and is, at the same time, more dispersed than other forms of wealth. House prices exhibit pronounced fluctuations that are closely linked to credit growth. Housing thus plays a crucial role in the macroeconomy, which has become even more pronounced under neoliberalism. We scrutinise different theoretical approaches to housing. Despite its theoretical shortcomings mainstream economics has pioneered empirical research on wealth effects in consumption and recently documented the role of house prices in financial cycles. Post-Keynesian theory emphasises endogenous money creation, cycles in asset prices and debt, and have formalised the notion of a debt-driven demand regime. Comparative Political Economy research has recently developed the concept of the varieties of residential capitalism, which has different structures of house ownership and housing finance at the core of political coalitions. Marxist political economy has long established the intrinsic link between ownership of land and economic rent and notes that homeownership can act as force of working class fragmentation. Wealth surveys can be used to trace the extent of conflicting interests in a class-relational approach.

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Bank credit and the housing market in OECD countries

Cited by 9 publications

References 42 publications

Impact of Macroeconomic Variables on Housing Prices in Saudi Arabia: A VAR Approach

Impact of Macroeconomic Variables on Housing Prices in Saudi Arabia: A VAR Approach

The relationship between housing prices and inflation rate in Turkey

Building blocks for the macroeconomics and political economy of housing

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