Recent reforms in Spanish housing markets: An evaluation using a DSGE model

Mora‐Sanguinetti, Juan S.; Rubio, Margarita

doi:10.1016/j.econmod.2014.04.028

Cited by 22 publications

(17 citation statements)

References 13 publications

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“…The …nancial intermediary is competitive and does not make pro…ts in the absence of shocks but, should a shock occur, the fact that only the variable-interest rate is directly a¤ected can generate nonzero pro…ts. 36 The …nancial intermediary problem for EUR is symmetrical.…”

Section: The Financial Intermediarymentioning

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: The Financial Intermediarymentioning

confidence: 99%

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

Rubio

Carrasco-Gallego²

2016

Economic Modelling

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“…There are two production sectors, one for housing and one for consumption/investment goods in line with Iacoviello and Neri (2010). Furthermore, we assume that houses can be either bought or rented as in Rubio (2018) and Ortega et al (2011) and Mora-Sanguinetti and Rubio (2014). Hence, households, firms, policymakers and the external sector interact in each period by trading final goods, housing, financial assets and production factors.…”

Section: The Modelmentioning

confidence: 99%

“…represents investment adjustment costs (see Christiano et al, 2005, for discussion). Maximizing (1) subject to equations (3) and (4) yields standard first-order conditions for optimizing households (see also Mora-Sanguinetti and Rubio, 2014).…”

Section: Householdsmentioning

confidence: 99%

“…The intertemporal elasticities of substitution σ c = σ h = 1 as well as habits h = 0.6 are set close to the mode estimates in Smets and Wouters (2003). Capital depreciation rates are set to a standard value of δ k,j = δ g = 0.025, with j = p, h, and δ h = 0.01, the latter in line with Mora-Sanguinetti and Rubio (2014). The capital share in intermediate goods production is set to one third (Cooley and Prescott, 1995).…”

Section: Calibrationmentioning

confidence: 99%

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Who benefits from using property taxes to finance a labor tax wedge reduction?

Stähler

2019

Journal of Housing Economics

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We use a New Keynesian DSGE model with a rental housing market to evaluate how financing a labor tax wedge reduction through higher property taxation affects the real economy and welfare. We find that a labor tax wedge reduction generates favorable macroeconomic effects and improves international competitiveness, independent of the financing instrument used. Even though it negatively affects the housing market, property acquisition taxation outperforms all other instruments as the financing instrument in terms of welfare. This finding is the result of allowing households to decide whether to buy or to rent housing services and of the fact that, in this situation, they shift from purchasing to renting more housing services. Abandoning tax credit on mortgage interest payments effectively harms borrowers.

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“…In Greece, Italy, Portugal and Spain, the low proportions of social housing and private renting stock are closely related to the high age of leaving the parental home (Iacovou, 2002). More recently, in Spain, the repeal of the tax deduction for new home purchases and the increase in the related Value Added Tax, in 2012, probably have had a positive impact on tenancy rates (Ortega, Rubio and Thomas, 2011;Mora-Sanguinetti and Rubio, 2014).…”

Section: Early Stages Of Life In Couple and Housing Tenure Dynamicsmentioning

confidence: 99%

Recent increase of tenancy in young Spanish couples: sociodemographic factors and regional market dynamics

Azevedo

López-Colás

Cabrerizo

2019

J Hous and the Built Environ

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The increase of the proportion of rental-occupied dwellings between 2001 and 2011 is one of the most outstanding results of the 2011 Spanish census. This study aims to explain this increase in tenancy, unveiling the sociodemographic factors behind this pattern at the individual level, and at the regional level clarifying the role of market dynamics in this change. Accordingly, using the microdata from the 2001 and 2011 Spanish censuses, multilevel logistic models are estimated. Two main findings can be drawn from this study: the recent increase in tenancy occurs concurrently with a process of convergence towards a greater acceptance of tenancy among sociodemographic groups, and changes in housing purchase prices have an impact on the likelihood of a young Spanish couple being tenants. The policy implications of these findings are twofold. On the one hand, a more active role in the regulation of housing purchase prices to deter speculative demand is needed. On the other, a greater demand for tenancy requires changes in the tenure composition of Spanish housing stock. Finally, having effective alternatives to homeownership, young adults could rely less upon family networks during the transition to adulthood which could ultimately contribute to a reduction in late parental home-leaving and encourage family formation.

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Recent reforms in Spanish housing markets: An evaluation using a DSGE model

Cited by 22 publications

References 13 publications

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

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

Who benefits from using property taxes to finance a labor tax wedge reduction?

Recent increase of tenancy in young Spanish couples: sociodemographic factors and regional market dynamics

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