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ECONOMIC GROWTH AND INCREASING HOUSE PRICES
Author(s) -
Leung Charles Ka Yui
Publication year - 2003
Publication title -
pacific economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.34
H-Index - 33
eISSN - 1468-0106
pISSN - 1361-374X
DOI - 10.1111/j.1468-0106.2003.00219.x
Subject(s) - economics , population growth , house price , zero (linguistics) , relative price , index (typography) , monetary economics , population , macroeconomics , econometrics , demography , sociology , world wide web , computer science , linguistics , philosophy
. Several cities and countries in Asia and North America have experienced large increases in housing prices. We extend the 1991 paper by S. Rebelo to simulate this situation. We show that growth in real housing prices can result as economic growth persists, even when population growth is zero. Another finding is that reported increases in housing prices might be underestimated. In particular, the growth rate of a relative price index may converge to zero even when house prices in real terms display sustained growth.