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Housing Taxation and Financial Intermediation

Author

Listed:
  • Hamed Ghiaie

    (Département d'économique, Université de Cergy-Pontoise)

  • Jean-François Rouillard

    (Département d'économique, Université de Sherbrooke)

Abstract

Through the lens of a multi-agent dynamic general equilibrium model, we examine the effects of four permanent changes in housing taxes and deductions on macroeconomic aggregates and welfare. Our main result is that the presence of borrowing-constrained bankers dampen the negative consequences of housing taxation on output. The long-run tax multipliers found range from -1.02 to -0.6. The reduction in the deduction of mortgage interest payments delivers the lowest multiplier. We also implement revenue-neutral tax reforms and find that the repeal of mortgage deductibility is the only policy that generates gains in output.

Suggested Citation

  • Hamed Ghiaie & Jean-François Rouillard, 2018. "Housing Taxation and Financial Intermediation," Cahiers de recherche 18-01, Departement d'économique de l'École de gestion à l'Université de Sherbrooke, revised Nov 2018.
    • Handle: RePEc:shr:wpaper:18-01
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    File URL: http://gredi.recherche.usherbrooke.ca/wpapers/GREDI-1801.pdf
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    References listed on IDEAS

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Housing Taxation and Financial Intermediation
      by Christian Zimmermann in NEP-DGE blog on 2018-07-30 15:56:45

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    Cited by:

    1. Stähler, Nikolai, 2019. "Who benefits from using property taxes to finance a labor tax wedge reduction?," Journal of Housing Economics, Elsevier, vol. 46(C).
    2. Hirsch, Patrick, 2019. "Heterogeneous rental markets in a DSGE model of the euro area," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203633, Verein für Socialpolitik / German Economic Association.

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    More about this item

    Keywords

    Housing taxation; banking; dynamic general equilibrium.;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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