Exports and Property Prices in France: Are They Connected?

Égert, Balázs; Kierzenkowski, Rafał

doi:10.2139/ssrn.1649667

Cited by 6 publications

(5 citation statements)

References 27 publications

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“…Broadly similar patterns hold for other measures of price competitiveness and for both intra-euro or wider effective exchange rate measures (EC, 2010a). 11 Consistent with the underlying theory, price increases were particularly marked in the non-traded services sectors of overheating economies and especially in construction (Égert and Kierzenkowski, 2010). While some of these movements may have been equilibrium adjustments in prices, others most likely reflect unsustainably strong aggregate demand.…”

Section: Eco/wkp(2010)83mentioning

confidence: 79%

“…The expected increase in prices implied that borrowing to invest in housing appeared profitable irrespective of any actual or imputed rents (Fuentes Castro, 2010). In addition, high construction prices have been an important channel for crowding out exports through pushing up domestic costs (Égert and Kierzenkowski, 2010). The effect of strong domestic demand on housing was further amplified during ECO/WKP(2010)83 the upswing in Ireland and Spain by large inflows of migrants, further adding to the demand for accommodation.…”

Section: Housing Booms and Credit Cycles Aggravated Imbalancesmentioning

confidence: 99%

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Resolving and Avoiding Unsustainable Imbalances in the Euro Area

Barnes

2010

OECD Economics Department Working Papers

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Some euro area countries accumulated large and persistent external imbalances during the upswing, revealing important weaknesses in the macroeconomic management of the monetary union. Greece, Ireland, Portugal and Spain ran large current account deficits by historical standards, while Finland, Germany and the Netherlands had substantial surpluses. Some of these deficits and surpluses were larger than appear justified by economic fundamentals. The massive debt accumulation made deficit economies vulnerable to shocks, complicated their recovery from the world financial crisis, and has challenged the stability of the euro area. In some countries, fiscal policy in the past decade failed to counter and sometimes aggravated these pressures. External imbalances were driven by underlying domestic economic, financial and sometimes fiscal imbalances. These were the result of a combination of a wide range of country-specific shocks and insufficient macroeconomic and financial stabilisation. Movements in real interest rates in some countries contributed to diverging borrowing and saving patterns, which fuelled credit booms and a weakening of competitiveness in some deficit countries. Weaknesses in financial regulation and over-optimistic growth expectations encouraged excessive risk-taking in both deficit and surplus countries. Harmful imbalances can be characterised by a misallocation of resources and increased vulnerability. When the financial crisis hit, some deficit countries faced the combined problems of a sharp contraction in private demand, an impaired financial system and weak public finances. Unwinding large imbalances, in both deficit and surplus countries, will be a prolonged and difficult process. A new and cross-cutting approach to economic and financial management in the euro area is required to ensure balanced development in the future. While the shocks that led to this build-up of imbalances may not recur, similar pressures are likely to arise within the monetary union in the future. Macroeconomic, financial and fiscal management should be strengthened in an integrated way, alongside structural reforms. This should aim to achieve the differentiation necessary to improve stabilisation of national economies, while ensuring that the euro area as a whole is protected from unsustainable developments in individual countries. Important legislative changes are underway at EU level to improve the surveillance of imbalances and to help ensure that the necessary corrective action is undertaken where risks emerge. This working paper relates to the 2010 OECD Economic Survey of the Euro Area (www.oecd.org/eco/surveys/euroarea). Résorber et éviter les déséquilibres non soutenables dans la zone euro Certains pays de la zone euro ont accumulé des déséquilibres extérieurs importants et persistants durant la phase d’expansion, qui ont mis au jour de sérieuses déficiences dans la gestion macroéconomique de l’union monétaire. L’Espagne, la Grèce, l’Irlande et le Portugal ont enregistré des déficits de balance courante élevés par...

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Section: Eco/wkp(2010)83mentioning

confidence: 79%

Section: Housing Booms and Credit Cycles Aggravated Imbalancesmentioning

confidence: 99%

Resolving and Avoiding Unsustainable Imbalances in the Euro Area

Barnes

2010

OECD Economics Department Working Papers

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“…First, it may hinder the opportunity to reach competitiveness agreements between employees and employers, who face higher costs in gaining access to property (Projet de loi de Finance 2013de Finance , 2012; in that perspective, labour price is connected to property price. Second, Egert and Kierzenkowski (2010) provide some evidence that the evolution of property prices triggered resource reallocation from the exporting sector to the construction sector.…”

Section: Current Accounts Wages and Housing Prices In The Eurozonementioning

confidence: 99%

Capital Prices and Eurozone Competitiveness Differentials

Askenazy

2013

SSRN Journal

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Any opinions expressed here are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but the institute itself takes no institutional policy positions. The IZA research network is committed to the IZA Guiding Principles of Research Integrity.The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public.IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion.

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“…This could be explained by the fact that monetary expansion affects demand shifters of goods and services in both China and abroad and such effects then cause variation in performance of the foreign equity market. In a recent work on role of export sector in property price movement, Égert and Kierzenkowski () find that resource reallocation from the exporting to the construction sector triggered by fast rising property prices hindered France to meet world export demand.…”

Section: Theoretical Underpinningsmentioning

confidence: 99%

International Transmission Mechanisms and Contagion in Housing Markets

Nanda

Yeh

2015

World Economy

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This paper explores international transmission mechanism and its role in contagion effect in the housing markets across six major Asian cities. The analysis is based on the identification of house price diffusion effects through a global vector autoregressive (GVAR) model estimated using quarterly data for six major Asian cities (Hong Kong, Tokyo, Seoul, Singapore, Taipei and Bangkok) from 1991Q1 to 2011Q2. The empirical results indicate that the open economies heavily relying on international trade such as Singapore, Japan (Tokyo), Taiwan (Taipei) and Thailand (Bangkok) show positive correlations between the economy's openness and house prices, which is consistent with the Balassa–Samuelson hypothesis. Interestingly, some region‐specific conditions also appear to play important roles as determinants of house price movements, which may be driven by restrictive housing policies and demand–supply imbalances such as Singapore and Bangkok. These results are reasonably robust across several model specifications. The findings bear significant implications for formulation of investment strategy and public policies.

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Exports and Property Prices in France: Are They Connected?

Cited by 6 publications

References 27 publications

Resolving and Avoiding Unsustainable Imbalances in the Euro Area

Resolving and Avoiding Unsustainable Imbalances in the Euro Area

Capital Prices and Eurozone Competitiveness Differentials

International Transmission Mechanisms and Contagion in Housing Markets

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