Investigating the government’s role in the boom-and-bust cycles of the housing market
Bibliographic Data
| ID | 22190068 |
|---|---|
| Authors | Abolfazl Meshkini (0000-0002-3071-275X, Tarbiat Modares University), Sadegh Nejati (Tarbiat Modares University), Somayeh Alipour (Tarbiat Modares University) |
| Year | 2024 |
| Volume | 8 |
| Issue | 5 |
| Pages | 2248 |
| Publication date | 2024-05-22 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Journal of Infrastructure Policy and Development (JOURNAL) |
| Journal identifiers | ISSN: 2572-7923 • E-ISSN: 2572-7931 |
| Publisher | EnPress Publisher (PUBLISHER) |
| DOI | 10.24294/jipd.v8i5.2248 |
| OpenAlex | W4398214361 |
| Language | EN |
| References cited | 9 |
Governments intervene in the housing market via implementing various monetary, fiscal, foreign exchange and credit policies. By this, the housing market undergoes cycles of boom and bust as well as significant swings in value added and housing prices. Therefore, the main goal of this research is to consider the effect of the government’s change on the monetary and financial policy’s impact on the business cycles of the housing sector during the period of 1978–2020. On the other hand, we estimate the impact of monetary and fiscal policies on housing business cycles concerning government’s change. To calculate housing business cycles (boom and busts), the housing value added were initially de-trended using the Hodrick–Prescott filter. This paper takes a novel use of the threshold regression model with government’s change as threshold variable. According to the study’s findings, there are three threshold effects (two threshold levels or three regimes) of monetary and fiscal policy on housing business cycles. For instance, the money supply coefficient in the first regime was −1.68, indicating that the effect of monetary policy in this regime is countercyclical. in the second and third regimes, it was 0.19 and 0.03, respectively; indicating its alignment with the housing business cycle. Regarding the estimated models, we may derive several interesting conclusions. In first regime, the money supply is countercyclical and government expenditure is pro-cyclical. This means that monetary policy exacerbates recession and fiscal policy weakens it. in the second and third regimes, the money supply is pro-cyclical and government expenditure is countercyclical. As a result, while formulating their monetary policies, governments should give the housing sector more consideration. Additionally, when putting this policy into practice, the housing sector has to be carefully examined
Boom · Business · Bust · Economics · Engineering · Housing, Finance, and Neoliberalism
Threshold effects in non-dynamic panels
Was the expansion of housing credit in Japan good or bad
House prices and business cycles
How housing killed the Celtic tiger
Does money supply growth drive housing boom in China? A wavelet-based analysis
Housing price and transaction intensity correlation in Hong Kong
EU housing markets before financial crisis of 2008
The Housing Boom and Bust
Credit Supply and the Housing Boom
| Citation velocity | historical |
|---|---|
| Highly cited | No |