Open AccessThe Asymmetric effects of monetary policy on housing across the level of development
Author(s) -
Ejindu S. Ume,
Juan Pablo Medina,
Robert R. Reed
Publication year - 2015
Publication title -
estudios regionales en economía, población y desarrollo
Language(s) - English
Resource type - Journals
ISSN - 2007-3739
DOI - 10.20983/epd.2015.30.1
Subject(s) - economics , stock (firearms) , growth model , monetary economics , national wealth , investment (military) , wealth effect , fixed investment , wealth elasticity of demand , capital (architecture) , capital formation , labour economics , monetary policy , macroeconomics , human capital , financial capital , market economy , finance , mechanical engineering , politics , political science , law , engineering , history , archaeology
We study the effects of money growth in a neoclassical growth model with wealth effects. As the capital stock is the only component of wealth which contributes to an individual’s utility, the model should be interpreted as a model of housing production and housing wealth since the capital stock affects utility. Consistent with empirical evidence on the relationship between residential investment and GDP across countries, there are significant non-linearities between housing market activity and aggregate income in our framework