Munich Personal RePEc Archive

Systemic Stability of Housing and Mortgage Market: A state-dependent four-phase model

Xiao, Qin (2010): Systemic Stability of Housing and Mortgage Market: A state-dependent four-phase model.

This is the latest version of this item.

[img]
Preview
PDF
MPRA_paper_24371.pdf

Download (216kB) | Preview

Abstract

Motivated by the revealed preference approach to consumer theory, this study constructs a dynamic theoretical model which infers the unobservable household behavior from the observable patterns of housing and mortgage market activities. The model emphasizes the role of asymmetric responses of sellers in different phases of a housing market cycle in generating certain price and volume patterns. Such role has so far largely been ignored in both theoretical and empirical studies of housing markets. The model also establishes, theoretically, multiple channels via which housing and mortgage markets interact and via which speculative forces are propagated. In addition, it generates a testable result regarding the stability of the system formed by the two markets, which may be extended by endogenizing some important policy instruments.

Available Versions of this Item

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.