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Hokkaido University Collection of Scholarly and Academic Papers >
Graduate School of Economics and Business / Faculty of Economics and Business >
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Heterogeneous beliefs and housing-market boom-bust cycles
| Title: | Heterogeneous beliefs and housing-market boom-bust cycles |
| Authors: | Tomura, Hajime Browse this author |
| Keywords: | Asset price bubbles | | Monetary policy | | Financial liberalization | | House prices | | Credit constraints |
| Issue Date: | Apr-2013 |
| Publisher: | Elsevier B.V. |
| Journal Title: | Journal of Economic Dynamics and Control |
| Volume: | 37 |
| Issue: | 4 |
| Start Page: | 735 |
| End Page: | 755 |
| Publisher DOI: | 10.1016/j.jedc.2012.11.002 |
| Abstract: | This paper presents a business cycle model capturing the stylized features of housing-market boom-bust cycles in developed countries. The model implies that over-optimism of mortgage borrowers generates housing-market boom-bust cycles, if mortgage borrowers are credit-constrained and savers do not share their optimism. This result holds without price stickiness. If price stickiness is introduced into the model, then the model replicates a low policy interest rate during a housing boom as an endogenous reaction to a low inflation rate, given a Taylor rule. Thus, monetary easing observed during housing booms are consistent with the presence of over-optimism causing boom-bust cycles. |
| Type: | article (author version) |
| URI: | http://hdl.handle.net/2115/52667 |
| Appears in Collections: | 経済学院・経済学研究院 (Graduate School of Economics and Business / Faculty of Economics and Business) > 雑誌発表論文等 (Peer-reviewed Journal Articles, etc)
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Submitter: 戸村 肇
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