Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/212687 
Year of Publication: 
2010
Series/Report no.: 
BOFIT Discussion Papers No. 19/2010
Publisher: 
Bank of Finland, Institute for Economies in Transition (BOFIT), Helsinki
Abstract: 
This paper develops an open-economy DSGE model with a housing-market sector and a borrowing constraint. Contrary to standard conventions, domestic households are allowed to invest in foreign housing and vice versa. Using Bayesian methods, the model is applied to data for Hong Kong. The results show that Hong Kong s housing market is quite open to foreign investment, and perhaps more significantly, that variations in the loan-to-value ratio and housing preference shocks largely explain business cycle volatility.
Persistent Identifier of the first edition: 
ISBN: 
978-952-462-695-8
Document Type: 
Working Paper

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