Browsing by Subject "avoin talous"

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  • Funke, Michael; Paetz, Michael (2010)
    BOFIT Discussion Papers 19/2010
    Published in Journal of Housing Economics, Volume 22, Issue 1, March 2013, Pages 62-76 as "Housing prices and the business cycle: An empirical application to Hong Kong"
    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.