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NEXUS BETWEEN HOUSING AND THE MACRO ECONOMY: THE HONG KONG CASE
Author(s) -
HO LOK SANG,
WONG GARY
Publication year - 2008
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.1468-0106.2008.00398.x
Subject(s) - nexus (standard) , economics , consumption (sociology) , investment (military) , macro , population , economy , monetary economics , macroeconomics , social science , programming language , demography , sociology , politics , computer science , political science , law , embedded system
This paper shows that, consistent with the ‘economic base’ theory, exports drive domestic consumption and domestic investment, but housing appears to serve as an important link between exports and domestic expenditures. Focusing on the Hong Kong economy, which is a small open economy with a big population, we found that exports and interest rates drive housing prices over a long period, while housing prices in turn drive domestic expenditures.