Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/39433 
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dc.contributor.authorBuiter, Willem H.en
dc.date.accessioned2010-08-24-
dc.date.accessioned2010-08-31T12:14:08Z-
dc.date.available2010-08-31T12:14:08Z-
dc.date.issued2010-
dc.identifier.citation|aEconomics: The Open-Access, Open-Assessment E-Journal|c1864-6042|v4|h2010-22|nKiel Institute for the World Economy (IfW)|lKiel|y2010|p1-29en
dc.identifier.pidoi:10.5018/economics-ejournal.ja.2010-22en
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
dc.language.isoengen
dc.publisher|aKiel Institute for the World Economy (IfW) |cKielen
dc.subject.jelE2en
dc.subject.jelE3en
dc.subject.jelE5en
dc.subject.jelE6en
dc.subject.jelG1en
dc.subject.ddc330en
dc.subject.keywordWealth effecten
dc.subject.keywordhouse pricesen
dc.subject.keywordspeculative bubblesen
dc.subject.stwImmobilienpreisen
dc.subject.stwBubblesen
dc.subject.stwVermögenseffekten
dc.subject.stwKonsumen
dc.subject.stwHypotheken
dc.subject.stwZeitpräferenzen
dc.subject.stwOverlapping Generationsen
dc.titleHousing wealth isn't wealth-
dc.typeArticleen
dc.identifier.ppn63372601Xen
dc.rights.licensehttp://creativecommons.org/licenses/by-nc/2.0/de/deed.enen
dc.identifier.repecRePEc:zbw:ifweej:201022en
econstor.citation.journaltitleEconomics: The Open-Access, Open-Assessment E-Journalen
econstor.citation.issn1864-6042en
econstor.citation.volume4en
econstor.citation.issue2010-22en
econstor.citation.publisherKiel Institute for the World Economy (IfW)en
econstor.citation.publisherplaceKielen
econstor.citation.year2010en
econstor.citation.startpage1en
econstor.citation.endpage29en

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