Explaining the Evolution of the U.S. Housing Market

Seok, Byoung Hoon; You, Hye Mi

doi:10.1017/s1365100516001267

Cited by 2 publications

(1 citation statement)

References 38 publications

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“…Aggregate productivity in both sectors,

Z_{f}

and

Z_{h}

, are assumed to be constant at one. We use very standard values for the production‐related parameters: we choose

α = 0.32

and

δ_{k} = 0.1

, and we set

η = 0.13

following Seok and You (2019). The social security tax, τ, is set to match a replacement ratio of 33% over average labor income following Nakajima (2010), and social security benefits, b , are chosen in order for the government to run a balanced budget.…”

Section: Life‐cycle Modelmentioning

confidence: 99%

Homeownership and Housing Transitions: Explaining the Demographic Composition

Zubairy

2020

Int Economic Review

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We document the evolution of homeownership rate across various age groups for the period 1995-2015. We find that variations in the homeownership rates are relatively large for the young, which is mostly driven by renter-to-owner transitions. In order to explain these empirical facts, we consider a life-cycle model featuring housing tenure decisions. Housing is modeled as an indivisible and lumpy investment subject to both loan-tovalue (LTV) and debt-to-income (DTI) credit constraints and transaction fees. Our analysis suggests that variations in the DTI limit play a crucial role in accounting for the uneven behavior across age groups.

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“…Aggregate productivity in both sectors,

Z_{f}

and

Z_{h}

, are assumed to be constant at one. We use very standard values for the production‐related parameters: we choose

α = 0.32

and

δ_{k} = 0.1

, and we set

η = 0.13

Section: Life‐cycle Modelmentioning

confidence: 99%

Homeownership and Housing Transitions: Explaining the Demographic Composition

Zubairy

2020

Int Economic Review

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Inequality over the business cycle: the role of distributive shocks

2021

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This paper examines how wealth and income inequality dynamics are related to fluctuations in the functional income distribution over the business cycle. In a panel estimation for OECD countries between 1970 and 2016, although inequality is, on average countercyclical and significantly associated with the capital share, one-third of the countries display a pro- or noncyclical relationship. To analyze the observed pattern, we incorporate distributive shocks into an RBC model, where agents are ex ante heterogeneous with respect to wealth and ability. We find that whether wealth and income inequality behave countercyclically or not depends on the elasticity of intertemporal substitution and the persistence of shocks. We match the model to quarterly US data using Bayesian techniques. The parameter estimates point toward a non-monotonic relationship between productivity and inequality fluctuations. On impact, inequality increases in response to TFP shocks but subsequently declines. Furthermore, TFP shocks explain 17% of inequality fluctuations.

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Explaining the Evolution of the U.S. Housing Market

Cited by 2 publications

References 38 publications

Homeownership and Housing Transitions: Explaining the Demographic Composition

Homeownership and Housing Transitions: Explaining the Demographic Composition

Inequality over the business cycle: the role of distributive shocks

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