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Housing cycles and the period of production

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  • Gabriel Lee

Abstract

US fixed residential investment is one of the most periodic economic time series. A theory of housing cycles is analysed on the basis of the period of housing construction. Substantial lags between planning and completion phases of housing construction cause housing investment to respond cyclically to exogenous shocks in demand and production costs. Known structural parameters of the housing industry provide sharp numerical benchmarks for the resulting dynamic system. The calibrated model with two construction lags describes the housing data and cycles well.

Suggested Citation

  • Gabriel Lee, 1999. "Housing cycles and the period of production," Applied Economics, Taylor & Francis Journals, vol. 31(10), pages 1219-1230.
    • Handle: RePEc:taf:applec:v:31:y:1999:i:10:p:1219-1230
    DOI: 10.1080/000368499323436
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    References listed on IDEAS

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    1. Jeremy C. Stein, 1993. "Prices and Trading Volume in the Housing Market: A Model with Downpayment Effects," NBER Working Papers 4373, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Dieci, Roberto & Westerhoff, Frank, 2016. "Heterogeneous expectations, boom-bust housing cycles, and supply conditions: A nonlinear economic dynamics approach," Journal of Economic Dynamics and Control, Elsevier, vol. 71(C), pages 21-44.
    2. Evren Erdoğan Coşar, 2012. "Analysis of cyclical behaviour of investment expenditures for the Turkish economy," Applied Economics Letters, Taylor & Francis Journals, vol. 19(13), pages 1213-1221, September.
    3. Dieci, Roberto & Westerhoff, Frank, 2015. "Heterogeneous expectations, boom-bust housing cycles, and supply conditions: A nonlinear dynamics approach," BERG Working Paper Series 99, Bamberg University, Bamberg Economic Research Group.

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