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BOOMS AND BUSTS IN A HOUSING MARKET WITH HETEROGENEOUS AGENTS

Published online by Cambridge University Press:  03 July 2017

G. Ascari ,
N. Pecora  and
A. Spelta
G. Ascari
Affiliation:
University of Oxford and University of Pavia
N. Pecora
Affiliation:
Catholic University
A. Spelta*
Affiliation:
Catholic University
*
Address correspondence to: Alessandro Spelta, Catholic University, Largo Gemelli 1, 20100, Milano, Italy; e-mail: alessandro.spelta@unicatt.it.
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Abstract

We develop a dynamic partial equilibrium model of the housing market, in which the dynamics of the house price is determined by the interaction between chartists and fundamentalists. The model endogenously generates episodes of boom and bust in the house price and can replicate the recent US house price dynamics, and points to endogenous and exogenous behavioral factors as the main determinants of such dynamics.

Keywords

Housing MarketHeterogeneous ExpectationsBoom-Bust
Type
Articles
Information
Macroeconomic Dynamics , Volume 22 , Special Issue 7: Recent Insights into Financial, Housing, and Monetary Markets , October 2018 , pp. 1808 - 1824
Copyright
Copyright © Cambridge University Press 2017 

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