Does total-factor productivity drive housing prices? A growth-accounting exercise for four countries

Moro, Alessio; Nuño, Galo

doi:10.1016/j.econlet.2011.12.038

Cited by 18 publications

(17 citation statements)

References 8 publications

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“…37 The …rm problem is similar for EUR. Therefore, economy-wide aggregates in country SP are The market-clearing condition for the …nal good in country SP is nY SP t = nC SP t + (1 n) C SP t + n 2 d 2 t .…”

Section: Intermediate Goods and House Producersmentioning

confidence: 99%

Coordinating macroprudential policies within the Euro area: The case of Spain

Rubio

Carrasco-Gallego²

2016

Economic Modelling

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In the aftermath of the global …nancial crisis, there is consensus on the need for macroprudential policies to promote …nancial stability. However, the optimal way to implement such policies in the Euro area is a question open to debate, given that countries have to coordinate. In this paper, we propose a two-country, two-sector monetary union dynamic stochastic general equilibrium model (DSGE) with housing to analyze the optimal implementation of macroprudential policies in the Euro area. Currently, Spain is the only country within the EU that has not established a macroprudential regulator. We use Spain as a natural experiment to study the e¤ects of a lack of coordination in the use of macroprudential policies in the European Monetary Union (EMU). We focus on a particular macroprudential policy, a rule regarding the loan-to-value ratio, which responds countercyclically to credit booms. We …nd that such a policy is welfare enhancing for the Euro area. Nevertheless, if one country does not implement the policy, but the rest of the EMU does, as in the current situation with Spain, this country still yields some bene…ts as a result of its partners'implementation of the policy because it gains from a more stable …nancial system without incurring any output costs. However, if all Euro countries actively implement the policy, the welfare gains for all of them are larger.

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Section: Intermediate Goods and House Producersmentioning

confidence: 99%

Coordinating macroprudential policies within the Euro area: The case of Spain

Rubio

Carrasco-Gallego²

2016

Economic Modelling

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“…Thus, clearly a housing bubble developed in Spain, before the crisis. Moro and Nuño (2012) …nd that the house price di¤erential between Spain and Germany was mainly demand driven. 5 In our model, the asset bubble in Spain is approximated by a housing demand shock.…”

Section: The Spanish Experiencementioning

confidence: 99%

“…Even if the …nancial intermediary is competitive and does not make pro…ts in the absence 2 1 In log-linearized terms, the new …xed interest rate is always equal to the past …xed interest rate, therefore, equation (26) does not introduce a kink. of shocks; should a shock occur, the fact that only the variable-interest rate is directly a¤ected can generate non-zero pro…ts.…”

Section: The Financial Intermediarymentioning

confidence: 99%

Spain and the Crisis: Housing Prices, Credit and Macroprudential Policies

Rubio

Carrasco-Gallego

2017

Singapore Econ. Rev.

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In this paper, we propose a two-country, two sector monetary union DSGE model with housing.One of the countries is calibrated to represent the Spanish economy while the other one is the rest of the European monetary union. First, we illustrate how looser credit conditions coming from the Euro area, together with increases in housing demand, lead to an increase in house prices and credit in Spain. Then, we analyze to what extent, macroprudential policies could have avoided the excess in credit that triggered the …nancial crisis in Spain. We …nd that a countercyclical loan-to-value rule that mainly responds to house prices would have mitigated the credit boom in Spain. These results can also be applied to other countries facing similar problems in the housing sector and thinking about implementing macroprudential policies.

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“…Therefore, the reflection of availability of low interest credit rate did lead toward an unsustainable enlargement of private (in Ireland, Portugal and Spain) as well as public (in Greece and Portugal) debt in the actual crises that hit these countries (More, 2013b). In addition, dropping the real interest rate in different countries after they joined the Eurozone area as well as the incoming capital increased unmaintainable development, comprising excess credit dynamics as well as real estate bubbles in different countries like Spain (Moro & Nuño, 2012) and a rapid increase in fiscal spending for instance in Greece. Likewise, it did reduce the stress for pursuing a comprehensive economic reform to recover competitiveness in the EMU in order to allow countries to finance easily their existing account deficits via abundant incoming working capital (Bindseil & König, 2012).…”

Section: The Effects Of the Current Crisis On European Economic Integmentioning

confidence: 99%

“…This structural reform undoubtedly does create better economic outcomes but the matter of the fact is that this approach it is long-term oriented solution. Hence, in this constellation, in the short term the coherent, pragmatic and possible solution to overcome the current economic crises is to stock up a new period of economic growth at European countries in order to endorse a significant augment in employment, which will stabilize the financial situation in affected countries (Moro &Nuño, 2012).…”

Section: The Effects Of the Current Crisis On European Economic Integmentioning

confidence: 99%

The Implications/Reflections of European Economic Integration in Kosovo’s Business Environment Managers’ Attitude towards European Economic Integration Process

Blakqori¹,

Fejza²,

Hyseni³

2014

IJBM

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This research study does seek to investigate and presumably explore managers' prospect and attitude towards the implications/reflections of European economic integration in Kosovo's business environment. In this regard, in order to have rich data twenty-four (24) in-depth semi structured interviews have been conducted with different managers' that currently are working in fourteen (14) variety organizations. This particular research study explicitly argues the importance and relevance of economic integration process in managers' conviction towards creating a wide range of business opportunities as a result of removing the current trade barriers. This comprehensive process does prompt organizations to expand their business scope of activities as well as developing business ties with foreign counterparts that could have direct impact in improving organizations competitive advantage. In addition, even though, this economic process is conceived as great source of creating new opportunities from managers' prospect, the main concern though is whether the current Kosovo's organization does have the intellectual, technical, infrastructural and logistical capacities to embrace this economic process accordingly.

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Does total-factor productivity drive housing prices? A growth-accounting exercise for four countries

Abstract: Housing prices diverge from construction prices after 1997 in four major countries. Besides, total-factor productivity (TFP) differences between construction and the general economy account for the evolution of construction prices in the US and Germany, but not in the UK and Spain.

Cited by 18 publications

References 8 publications

Coordinating macroprudential policies within the Euro area: The case of Spain

Coordinating macroprudential policies within the Euro area: The case of Spain

Spain and the Crisis: Housing Prices, Credit and Macroprudential Policies

The Implications/Reflections of European Economic Integration in Kosovo’s Business Environment Managers’ Attitude towards European Economic Integration Process

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