TY - JOUR
T1 - Real Estate, the External Finance Premium and Business Investment
T2 - A Quantitative Dynamic General Equilibrium Analysis
AU - Jin, Yi
AU - Leung, Charles K.Y.
AU - Zeng, Zhixiong
PY - 2012/3
Y1 - 2012/3
N2 - This article studies the connection between the capital market and the real estate market. Empirically, we find that positive real house price shocks lower the external finance premium and stimulate nonresidential investment and real gross domestic product (GDP). Our theoretical framework is able to mimic the volatility of the external finance premium, the relative price of real estate and capital and the investment in real estate and capital. It also captures the cyclicality of the external finance premium and of real estate prices. The contribution of real estate price fluctuations to the variability of the external finance premium and the GDP is confirmed to be significant. © 2011 American Real Estate and Urban Economics Association.
AB - This article studies the connection between the capital market and the real estate market. Empirically, we find that positive real house price shocks lower the external finance premium and stimulate nonresidential investment and real gross domestic product (GDP). Our theoretical framework is able to mimic the volatility of the external finance premium, the relative price of real estate and capital and the investment in real estate and capital. It also captures the cyclicality of the external finance premium and of real estate prices. The contribution of real estate price fluctuations to the variability of the external finance premium and the GDP is confirmed to be significant. © 2011 American Real Estate and Urban Economics Association.
UR - http://www.scopus.com/inward/record.url?scp=84857368470&partnerID=8YFLogxK
UR - https://www.scopus.com/record/pubmetrics.uri?eid=2-s2.0-84857368470&origin=recordpage
U2 - 10.1111/j.1540-6229.2011.00315.x
DO - 10.1111/j.1540-6229.2011.00315.x
M3 - RGC 21 - Publication in refereed journal
SN - 1080-8620
VL - 40
SP - 167
EP - 195
JO - Real Estate Economics
JF - Real Estate Economics
IS - 1
ER -