Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/53861
Authors: 
Tomura, Hajime
Year of Publication: 
2008
Series/Report no.: 
Bank of Canada Working Paper 2008,9
Abstract: 
This paper considers a dynamic stochastic general equilibrium model for a small open economy and finds that an improvement in the terms of trade causes a housing boom-bust cycle if the duration of the improvement is uncertain. It is shown that as the economy has better access to the international financial market, the extent of the housing boom and bust gets larger. Also, an increase in the loan-to-value ratio in the domestic mortgage market tends to enhance the extent of the housing boom and bust when the economy has good access to the international financial market.
Subjects: 
Business fluctuations and cycles
Credit and credit aggregates
JEL: 
E44
F41
Document Type: 
Working Paper
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