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dc.contributor.authorBuiter, Willem H.en_US
dc.date.accessioned2010-08-24en_US
dc.date.accessioned2010-08-31T12:14:08Z-
dc.date.available2010-08-31T12:14:08Z-
dc.date.issued2010en_US
dc.identifier.citationEconomics: The Open-Access, Open-Assessment E-Journal 4 2010-22 1-29 doi:10.5018/economics-ejournal.ja.2010-22en_US
dc.identifier.pidoi:10.5018/economics-ejournal.ja.2010-22-
dc.identifier.urihttp://hdl.handle.net/10419/39433-
dc.description.abstractA fall in house prices due to a change in fundamental value redistributes wealth from those long housing (for whom the fundamental value of the house they own exceeds the present discounted value of their planned future consumption of housing services) to those short housing. In a closed economy representative agent model (the special case when the birth rate is zero, of the Yaari-Blanchard OLG model used in the paper), there is no pure wealth effect on consumption from a change in house prices if this represents a change in their fundamental value. When the birth rate is positive, higher fundamental house prices driven by the housing demand of future generations will boost current consumption. There is a pure wealth effect on consumption from a change in house prices even in the representative agent model, if this reflects a change in the speculative bubble component of house prices. Two other channels through which a fall in house prices can affect aggregate consumption are (1) redistribution effects if the marginal propensity to spend out of wealth differs between those long housing (the old, say) and those short housing (the young, say) and (2) collateral or credit effects due to the collateralisability of housing wealth and the non-collateralisability of human wealth. A decline in house prices reduces the scope for mortgage equity withdrawal. For given sequences of future after-tax labour income and interest rates, a fall in house prices will then depress consumption in the short run while boosting it in the long run.en_US
dc.language.isoengen_US
dc.publisherKiel Institute for the World Economy (IfW) Kielen_US
dc.relation.ispartofseriesEconomics 2010-22en_US
dc.subject.jelE2en_US
dc.subject.jelE3en_US
dc.subject.jelE5en_US
dc.subject.jelE6en_US
dc.subject.jelG1en_US
dc.subject.ddc330en_US
dc.subject.keywordWealth effecten_US
dc.subject.keywordhouse pricesen_US
dc.subject.keywordspeculative bubblesen_US
dc.subject.stwImmobilienpreisen_US
dc.subject.stwBubblesen_US
dc.subject.stwVermögenseffekten_US
dc.subject.stwKonsumen_US
dc.subject.stwHypotheken_US
dc.subject.stwZeitpräferenzen_US
dc.subject.stwOverlapping Generationsen_US
dc.titleHousing wealth isn't wealthen_US
dc.typeArticleen_US
dc.identifier.ppn63372601Xen_US
dc.identifier.urlhttp://www.economics-ejournal.org/economics/journalarticles/2010-22en_US
dc.rights.licensehttp://creativecommons.org/licenses/by-nc/2.0/de/deed.en-
dc.identifier.repecRePEc:zbw:ifweej:201022-
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