Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/119428
Authors: 
Lee, Tsung-Hsien Michael
Chen, Wenjuan
Year of Publication: 
2015
Series/Report no.: 
SFB 649 Discussion Paper 2015-020
Abstract: 
Numerous papers have tried to understand housing's role in the economy and have not reached an agreement. In this paper we turn to the asymmetric relationship between housing and the overall economic activity. We find that the relation between building permits and GDP is regime-dependent. Causality analysis suggests that the housing variable leads output only in the regime associated with periods when the housing and business cycles are experiencing contractions. Our findings not only echo the argument that housing leads the business cycles, but also show that it has time-varying effect on the overall economic activity.
Subjects: 
Housing
Business Cycles
Regime-switching
Causality
JEL: 
C32
C34
E32
Document Type: 
Working Paper

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