Growth, financial development, and housing booms

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22 Scopus citations

Abstract

We present a quantitative model to assess the effect of a housing boom on economic growth. In the model, a housing boom boosts economic growth through expanding homeowning entrepreneurs’ borrowing capacities and mitigating capital misallocation, however, at different rates across different levels of financial development. Our analysis of 23 housing boom episodes in 54 countries from 1995 to 2012 corroborates the model's implication: economic growth during a housing boom is greater in countries with less developed financial systems.

Original languageEnglish
Pages (from-to)91-102
Number of pages12
JournalEconomic Modelling
Volume69
DOIs
StatePublished - Jan 2018

Keywords

  • Economic growth
  • Entrepreneurship
  • Financial development
  • Housing collateral

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