Economic growth and increasing house prices
Research output: Journal Publications and Reviews (RGC: 21, 22, 62) › 21_Publication in refereed journal › peer-review
|Journal / Publication||Pacific Economic Review|
|Publication status||Published - Jun 2003|
|Link to Scopus||https://www.scopus.com/record/display.uri?eid=2-s2.0-0037592401&origin=recordpage|
Several cities and countries in Asia and North America have experienced large increases in housing prices. We extend the 1991 paper by S. Rebelo to simulate this situation. We show that growth in real housing prices can result as economic growth persists, even when population growth is zero. Another finding is that reported increases in housing prices might be underestimated. In particular, the growth rate of a relative price index may converge to zero even when house prices in real terms display sustained growth.