On Roots of Housing Bubbles

Working Papers from Research and Monetary Policy Department, Central Bank of the Republic of Turkey

Abstract: This paper is about instability of equilibrium real rents in a pure exchange economy. Our main result hinges upon a low degree of substitutability between housing services and other commodities together with a low share of owner-occupied houses. We argue that regions or economies with a low share of owner-occupied houses are more prone to housing bubbles that are driven by locally unstable rent dynamics.

Keywords: Housing bubbles; rents; stability of equilibrium; CES utility; Leontief utility (search for similar items in EconPapers)
JEL-codes: C62 D11 D51 R21 R31 (search for similar items in EconPapers)
Date: 2008
New Economics Papers: this item is included in nep-ure
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Citations: View citations in EconPapers (2)

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Working Paper: On Roots of Housing Bubbles (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:tcb:wpaper:0803

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