We build an aggregate model with different size houses and liquid assets. Typical households are born, are subject to idiosyncratic earnings risk, and save for both life-cycle reasons and housing reasons. Typically, a subset of these households, after accumulating some assets, make a down payment and buy a small starter's house or flat. As time passes, some households upgrade to a larger and nicer house. Households with houses may also eventually downgrade to a flat or even to no house and flat owners may sell. Our specification attempts to replicate some important features of modern aggregate economies: The distribution of earnings and of housing and non-housing wealth as well as some macroeconomic aggregates, including features of the mortgage issuing sector. (JEL: E21) (c) 2008 by the European Economic Association.
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Volume (Year): 6 (2008) Issue (Month): 2-3 (04-05) Pages: 705-714 Download reference. The following formats are available: HTML
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Matthew Chambers & Carlos Garriga & Don E. Schlagenhauf, 2009.
"Accounting For Changes In The Homeownership Rate,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 50(3), pages 677-726, 08.
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