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Clustered housing cycles

Hernandez-Murillo, Ruben; Owyang, Michael T.; Rubio, Margarita

Authors

Ruben Hernandez-Murillo Ruben.Hernandez-Murillo@clev.frb.org

Michael T. Owyang Owyang@stls.frb.org



Abstract

Using a panel of U.S. city-level building permits data, we estimate a Markov-switching model of housing cycles that allows cities to systematically deviate from the national housing cycle. These deviations occur for clusters of cities that experience simultaneous housing contractions. We find that cities do not form housing regions in the traditional geographic sense. Instead, similarities in factors affecting the demand for housing (such as population growth or availability of credit) appear to be more important determinants of cyclical co-movements than similarities in factors affecting the supply for land (such as the availability of developable land or the elasticity of land supply).

Citation

Hernandez-Murillo, R., Owyang, M. T., & Rubio, M. (2017). Clustered housing cycles. Regional Science and Urban Economics, 66, https://doi.org/10.1016/j.regsciurbeco.2017.06.003

Journal Article Type Article
Acceptance Date Jun 19, 2017
Online Publication Date Jun 20, 2017
Publication Date Sep 1, 2017
Deposit Date Jun 21, 2017
Publicly Available Date Dec 21, 2018
Journal Regional Science and Urban Economics
Print ISSN 0166-0462
Electronic ISSN 0166-0462
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 66
DOI https://doi.org/10.1016/j.regsciurbeco.2017.06.003
Keywords Clustered Markov switching, business cycles, building permits, co-movements
Public URL http://eprints.nottingham.ac.uk/id/eprint/43653
Publisher URL http://www.sciencedirect.com/science/article/pii/S0166046217302272
Copyright Statement Copyright information regarding this work can be found at the following address: http://eprints.nottingham.ac.uk/end_user_agreement.pdf

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Copyright Statement
Copyright information regarding this work can be found at the following address: http://eprints.nottingham.ac.uk/end_user_agreement.pdf





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