International capital flows and expectation-driven boom–bust cycles in the housing market

Tomura, Hajime

doi:10.1016/j.jedc.2010.04.008

Cited by 25 publications

(10 citation statements)

References 19 publications

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“…the production of the final good, Λ  , is set at 07, to capture the case of a middle-income economy where imports are about a third of GDP, as in Tomura (2010) and Medina and Roldós (2014). The elasticity of substitution between baskets of domestic and imported composite intermediate goods, , is set at 15, a fairly standard value used for instance by Cuadra and Nuguer (2014) for Mexico.…”

Section: The Distribution Parameter Between Domestic and Imported Intmentioning

confidence: 99%

External shocks, financial volatility and reserve requirements in an open economy

Agénor

Alper

Silva

2018

Journal of International Money and Finance

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The performance of a simple, countercyclical reserve requirement rule is studied in a dynamic stochastic model of a small open economy with financial frictions, imperfect capital mobility, a managed float regime, and sterilized foreign exchange market intervention. Bank funding sources, domestic and foreign, are imperfect substitutes. The model is calibrated and used to study the effects of a temporary drop in the world risk-free interest rate. Consistent with stylized facts, the shock triggers an expansion in domestic credit and activity, asset price pressures, and a real appreciation. An optimal, credit-based reserve requirement rule, based on minimizing a composite loss function, helps to mitigate both macroeconomic and financial volatility-with the latter defined both in terms of a narrow measure based on the credit-to-output ratio, the ratio of capital flows to output, and interest rate spreads, and a broader measure that includes real asset prices as well. Greater reliance on sterilization implies a less aggressive optimal reserve requirements rule, implying that the two instruments are partial substitutes.

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Section: The Distribution Parameter Between Domestic and Imported Intmentioning

confidence: 99%

External shocks, financial volatility and reserve requirements in an open economy

Agénor

Alper

Silva

2018

Journal of International Money and Finance

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“…Krugman (1998) argues that the public will reinforce their expectations of inflation and successfully circumvent the economic liquidity trap should they believe expansionary monetary policies are not temporary. Tomura (2010) and Burnside et al (2016) argue that unstable expectation results in the real estate cycle. In addition, expectation management can improve the stability and effectiveness of policy implementation Shin 2002, 2008).…”

Section: The Expectation Of Home Purchase Restriction and Corporate Imentioning

confidence: 99%

Home purchase restriction, real estate investment, and corporate innovation

Kuang

Chang-yu

Wang

2020

Front. Bus. Res. China

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It is ubiquitous for non-real estate firms to conduct real estate business in China. Home purchase restriction (HPR) affects corporate innovation by dampening the real estate investment of non-real estate firms. The extant literature has examined the impact of HPR on corporate innovation, but it has not focused on the expectation of HPR and the endogeneity problem. Employing a dataset of 1830 listed non-real estate firms over the period 2009–2016, this research explores the expectation of HPR on corporate innovation based on the motivations for real estate investment in non-real estate firms. We demonstrate that HPR facilitates the enhancement of research and development (R&D) investment in non-real estate listed firms by hindering real estate investment, particularly for non-high-tech firms. The effects of HPR arrive at the crest in the third implementation year and remain steady thereafter. The real estate investment of non-real estate firms rebounds and the R&D investment declines along with the cancellation of HPR. Tackling the selection bias and endogeneity problems, the baseline results are also robust. Hence, HPR should serve as a long-term vehicle to improving corporate innovation, in addition to preventing housing speculation.

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“…For example, Tomura (2010) identified the boom-bust cycle in housing market by analysing export flows within a small open market economy through a dynamic equilibrium model, which is similar to the mining boom-bust cycle in many developed nations such as in Australia. Han (2010) developed a random utility modelling framework to analyse the housing demand for large metropolitan cities, but this model cannot predict the precise dwelling need for rapidly growing small or medium types of towns, especially those towns affected by boom and bust commodity cycles.…”

Section: Mining Impacts On Housing Marketmentioning

confidence: 99%

Predicting impacts of major projects on housing prices in resource based towns with a case study application to Gladstone, Australia

2013

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International capital flows and expectation-driven boom–bust cycles in the housing market

Cited by 25 publications

References 19 publications

External shocks, financial volatility and reserve requirements in an open economy

External shocks, financial volatility and reserve requirements in an open economy

Home purchase restriction, real estate investment, and corporate innovation

Predicting impacts of major projects on housing prices in resource based towns with a case study application to Gladstone, Australia

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