House Prices and Economic Growth

Miller, Norman G.; Peng, Liang; Sklarz, Michael

doi:10.1007/s11146-009-9197-8

Cited by 106 publications

(83 citation statements)

References 25 publications

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“…A number of studies, (Kapopoulos and Siokis (2005), Ebrahim and Hussain (2010)) confirm that, ceteris paribus, real estate exposure is negatively related to stock and other risky financial asset holdings. Miller et al (2009) show that after controlling for wealth, income and other household characteristics, the relative share of risky assets is a negative function of the real estate ownership in the US. By contrast, Kapopoulos and Siokis (2005) find that in the case of Greece real estate prices, at least in Athens area, are a function of the General Index of the Athens Stock Exchange.…”

Section: Literature Reviewmentioning

confidence: 95%

Explaining house price changes in Greece

Gounopoulos

Merikas

Merika

et al. 2011

Applied Financial Economics

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This paper develops an equilibrium model for the Greek housing market that incorporates both macroeconomic as well as country-specific variables that affect demand for and supply of houses. In the overall uprising phase of the 23-year period examined (1985Q1-2008Q1), our investigation of short-term fluctuations in real house prices and stock prices confirms the inverse relationship between movements in the housing price index and the stock exchange general index, identifies the direction of causality as running from the financial sector to the real sector, and finds that, following an exogenous shock, reversion to the long-run equilibrium is a rather slow process. Furthermore, we identify a fundamental shift in the behaviour of Greek homeowners, who appear to be moving away from the treatment of housing as consumption good, towards treating house purchases as investment.

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Section: Literature Reviewmentioning

confidence: 95%

Explaining house price changes in Greece

Gounopoulos

Merikas

Merika

et al. 2011

Applied Financial Economics

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“…Few exceptions that we are aware of include: Leung (2003), Demary (2010), Miller et al, (2011), Simo-Kengne et al, (2012 and Nyakabawo et al, (2013). Leung (2003) developed a simple endogenous growth model to show that economic growth can induce the real house price growth; but this theoretical result need to be assessed empirically.…”

Section: Introductionmentioning

confidence: 99%

“…Leung (2003) developed a simple endogenous growth model to show that economic growth can induce the real house price growth; but this theoretical result need to be assessed empirically. Miller et al, (2011) applied a Common Correlation Error (CCE) model on metropolitan data and found that house price changes in the US affect significantly per capita GDP growth. Using panel time series methodology, similar result was found by Simo-Kengne et al, (2012), who reported a significant positive effect of house price appreciation on economic growth at both national and provincial levels in South Africa.…”

Section: Introductionmentioning

confidence: 99%

The causal relationship between house prices and growth in the nine provinces of South Africa: evidence from panel - Granger causality tests

Chang

Simo-Kengne

Gupta

2014

IJSE

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This paper analyses the causal relationship between housing activity and growth in nine provinces of South Africa for the period 1995-2011, using panel causality analysis, which accounts for cross-section dependency and heterogeneity across provinces. Our empirical results support unidirectional causality running from housing activity to economic growth for most of the provinces studied; bi-directional causality between housing activity and economic growth for Gauteng; and no causality in any direction between housing activity to economic growth in Eastern Cape and KwaZulu-Natal. Our findings provide important insights for housing policies and strategies for South Africa. Specifically, housing sector might be an efficient growth-led instrument for all the provinces except Eastern Cape and KwaZulu-Natal.

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“…Many economists argue that these events caused the recent dramatic changes in the behavior of financial and economic markets (Miller et al, 2011), even extending to global financial markets and economies. A growing literature recognizes the importance of the relationship between the housing market and the macro economy, showing that the interaction between house prices and economic growth imbeds important policy implications.…”

Section: Introductionmentioning

confidence: 99%

“…Economists and policy makers seemingly agree that house prices play an important role in stimulating the growth or decline of an economy. Miller et al, (2011) suggest that the strong housing market during the 2001 stock market crash may have saved the U.S. economy from a severe recession and that, in addition, the recent collapse of the housing market initiated he Great Recession. The housing market, thus, plays an important role in the economy and its performance affects its overall performance.…”

Section: Introductionmentioning

confidence: 99%

Temporal Causality between House Prices and Output in the U. S.: A Bootstrap Rolling-Window Approach

et al. 2013

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This paper examines the causal relationships between the real house price index and real GDP per capita in the U.S., using the bootstrap Granger (temporal) non-causality test and a fixed-size rolling-window estimation approach. We use quarterly time-series data on the real house price index and real GDP per capita, covering the period 1963:Q1 to 2012:Q2. The full-sample bootstrap non-Granger causality test result suggests the existence of a unidirectional causality running from the real house price index to real GDP per capita. A wide variety of tests of parameter constancy used to examine the stability of the estimated vector autoregressive (VAR) models indicate short-and long-run instability. This suggests that we cannot rely on the full-sample causality tests and, hence, this warrants a time-varying (bootstrap) rolling-window approach to examine the causal relationship between these two variables. Using a rolling window size of 28 quarters, we find that while causality from the real house price to real GDP per capita occurs frequently, significant, but less frequent, evidence of real GDP per capita causing the real house price also occurs. These results imply that while the real house price leads real GDP per capita, in general (both during expansions and recessions), significant feedbacks also exist from real GDP per capita to the real house price.

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House Prices and Economic Growth

Abstract: Economic growth, House prices, Wealth effect, Collateral effect, Common correlated effects estimators, Long horizon predictability, E23, E24, R11,

Cited by 106 publications

References 25 publications

Explaining house price changes in Greece

Explaining house price changes in Greece

The causal relationship between house prices and growth in the nine provinces of South Africa: evidence from panel - Granger causality tests

Temporal Causality between House Prices and Output in the U. S.: A Bootstrap Rolling-Window Approach

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