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Heterogeneous rental markets in a DSGE model of the euro area

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  • Hirsch, Patrick

Abstract

The euro area economies are bound together by monetary policy while still inhibiting many heterogeneities. Amongst them the share of homeowners. This paper presents a medium scale New Keynesian DSGE model of the euro area with an extensive housing market which explicitly models endogenous tenure choice. Results from the calibrated model indicate that there are various parameters determining the ownership rate. Dependent on the drivers of the homeownership, shocks have substantial heterogeneous effects on real variables when rates differ across countries.

Suggested Citation

  • 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.
    • Handle: RePEc:zbw:vfsc19:203633
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    References listed on IDEAS

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    5. d’Albis, Hippolyte & Iliopulos, Eleni, 2013. "Collateral constraints and rental markets," Economics Letters, Elsevier, vol. 121(3), pages 436-439.
    6. Giancarlo Corsetti & Joao B Duarte & Samuel Mann, 2022. "One Money, Many Markets [Fixed Rate Versus Adjustable Rate Mortgages: Evidence from Euro Area Banks]," Journal of the European Economic Association, European Economic Association, vol. 20(1), pages 513-548.
    7. Sami Alpanda & Sarah Zubairy, 2016. "Housing and Tax Policy," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 48(2-3), pages 485-512, March.
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    11. Dominic Quint & Pau Rabanal, 2014. "Monetary and Macroprudential Policy in an Estimated DSGE Model of the Euro Area," International Journal of Central Banking, International Journal of Central Banking, vol. 10(2), pages 169-236, June.
    12. Xiaojin Sun & Kwok Ping Tsang, 2017. "What Drives the Owner‐Occupied and Rental Housing Markets? Evidence from an Estimated DSGE Model," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 49(2-3), pages 443-468, March.
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    More about this item

    Keywords

    DSGE; ownership-rates; housing; heterogeneities; monetary union;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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