HOUSING IN A NEOCLASSICAL GROWTH MODEL

We present evidence that in the USA, the relative price of housing exhibits secular growth and that its growth rate is a stationary series. The ratio of the value of house stock to either consumption or GDP is also stationary. We develop a two‐sector neoclassical growth model with housing that is consistent with these facts. Among the long‐run determinants of the growth of housing prices and housing stock per capita are factor intensities, rates of technological progress in both the housing and non‐housing sectors, and the excess of population growth over land growth. We also study the model's transitional dynamics.     

Sectoral sources of sub-Saharan Africa’s convergence

From 1970 to 2010, sub-Saharan African’s (SSA) labour productivity hovered at around 6% of the US level. This lacklustre performance, which remained stubbornly low despite the SSA’s growth spurt that started in the mid-1990s, masks a great deal of variations across sectors and countries. Using a structural decomposition, we examine, for a representative sample of SSA countries, the sectoral sources that hold back their convergence to the US frontier. Our results suggest the presence of strong – and possibly long-lasting – headwinds that have wiped out the favourable effects of substantial, yet circumstantial, tailwinds. Headwinds, quantified by the unfavourable within- and reallocation-effects, are indicative of significant capital-deepening and technology gaps, both of which are extremely hard to bridge. The tailwinds, represented by favourable between-effects, result from the convergence of the SSA labour force to sectors where some US sectors have seen a slowdown of their productivity relative to that of the whole economy – a development unrelated to the fundamentals underlying the SSA economy. Although few exceptions emerged out of this general pattern, these results are indicative of a bleak outlook for the SSA economic performance at least in the medium run.     

GLOBAL POPULATION GROWTH,TECHNOLOGY, AND MALTHUSIAN CONSTRAINTS: A QUANTITATIVE GROWTH THEORETIC PERSPECTIVE

We structurally estimate a two‐sector Schumpeterian growth model with endogenous population and finite land reserves to study the long‐run evolution of global population, technological progress, and the demand for food. The estimated model closely replicates trajectories for world population, GDP, sectoral productivity growth, and crop land area from 1960 to 2010. Projections from 2010 onward show a slowdown of technological progress, and, because it is a key determinant of fertility costs, significant population growth. By 2100, global population reaches 12.4 billion and agricultural production doubles, but the land constraint does not bind because of capital investment and technological progress.     

A Normative Analysis of Housing-Related Tax Policy in a General Equilibrium Model of Housing Quality and Prices

We evaluate an array of housing-related tax policies in a general equilibrium model with endogenous housing quality and prices. The local government facilitates the provision of local public amenities, financed by an array of housing-related taxes, including a developer gross revenue tax, a property tax, a land tax, and a development license fee. In a competitive spatial equilibrium, all households optimize and reach the same utility, all monopolistically competitive developers optimize and receive zero profit, and both housing and land markets clear. We examine the effects of various tax policies on housing quality, housing prices, land rent, as well as the population and housing density. By evaluating quantitatively the welfare of the local economy, we establish a globally optimal tax scheme in the housing market: complete elimination of the property tax and imposition of a lower gross revenue tax (possibly fully eliminated) than both development and land taxes.     

Labour market discrimination and the macroeconomy

We measure the discriminatory ethnic and gender wage gaps in Georgia. Gender wage discrimination is larger than the ethnic wage discrimination. We use the estimated gaps in a general‐to‐specific vector autoregression framework to test for Granger causality between discrimination and growth, and estimate the long‐run effects of each variable on the other. Granger causality is found to be bidirectional, but it is only the net long‐run effect of discrimination on growth that is a large and highly significant negative effect. In the long‐run, a 10% increase in ethnic (gender) discrimination reduces economic growth by 3%–4% (8%–10%). Additionally, ethnic and gender wage differentials are found to be counter‐cyclical.     

R&D Spillovers and Growth: Specialization Matters

We explore the relationship between openness and growth by taking a closer look at trade‐related knowledge spillovers at the industry level. First, we estimate the relation between sectoral R&D expenditures, trade‐related spillovers, and growth. Next, we incorporate these R&D linkages in a computable general‐equilibrium model for the world economy. We simulate trade liberalization in the model with R&D spillovers and compare the effects on GDP in different regions with a non‐R&D‐based model simulation. We find that the GDP effects of trade liberalization are magnified considerably by R&D spillovers for some regions—notably Japan and Southeast Asia. In other regions, such as China, the additional GDP effects are modest. These findings can be traced back to changing specialization and import patterns.     

Growth effects of carbon policies: Applying a fully dynamic CGE model with heterogeneous capital

The paper develops a new type of computable general equilibrium (CGE) model in which growth is fully endogenous, based on the increasing specialization of sector-specific capital varieties. The model is used to simulate the effects of carbon policies on consumption, welfare, and sectoral development in the long run. The benchmark scenario is calculated based on endogenous sector-specific gains from specialization, which carry over to the simulations of a carbon policy following the 2 °C target. Applying the model to the Swiss economy, we find that carbon policy leads to growth rates of knowledge intensive sectors that are higher than in the benchmark and that all the non-energy sectors show positive growth rates. Compared to a state in which climate change has no negative effect, consumption in 2050 is reduced by 4.5% and entails a moderate but not negligible welfare loss.     

Time–frequency relationship between US output with commodity and asset prices

Commodity and asset prices have a well-documented effect on economic growth as manifested through various channels. At the same time, the business cycle influences the commodity and asset prices. Whereas empirical evidence on the effect of commodity and asset prices on the long-run economic growth is ambiguous, most of the previous researches highlight a positive correlation in the short run. The aim of this article is to disentangle the short- and long-run co-movements between US historical business cycles and commodity and asset prices over the period 1859–2013. For this purpose, we use a time–frequency approach and we test the historical influence of oil, gold, housing and stock prices over the output growth. In contrast to other studies, we control for the effect of other prices and monetary conditions, using the wavelet partial coherency. In line with the previous works, we discover that co-movements between economic growth and commodity and assets prices manifest especially in the short run. We also find that stock returns and housing prices have a more powerful effect on the US economic growth rate than the oil and gold prices. The long-run co-movements are documented especially around the World War II. Finally, when controlling for the influence of the interest rate, inflation and other commodity and asset prices, co-movements become weaker in the short run. In general, the oil and housing prices lead the GDP growth, the US output leads the gold prices, while there is no clear causality direction between business cycle and stock prices.     

Evolutionary micro-dynamics and changes in the economic structure

The paper aims to account for the empirical stylized facts related to changes in sectoral structures that have led to the growth of services in most advanced countries over recent decades. A growth model with evolutionary micro–founded structural change is developed, which formalizes the role of technical change and changes in intermediate demand as they affect the evolution of the sectoral composition of the economy and macro-economic growth. The simulated results are based on the use of the actual data, including Input–Output coefficients in the case of Germany. Three scenarios are identified, which account for the effects of a set of key parameters on changes in the structure of the economy.     

房价与地价关系的因果检验:1998-2006

文章在考虑通货膨胀的条件下,利用我国1998-2006年的房价和地价的季度数据建立误差纠正模型(ECM),使用Granger因果检验方法对我国的房价和地价的关系进行实证检验,得出结论:短期而言,房价对地价没有影响,而地价是房价的Granger原因;长期来说,房价和地价存在双向因果关系.因此,要控制房价,短期内关键是抑制地价过快上涨;长期则要通过合理安排土地供给,加强住宅的建设规划引导,从而避免房地产价格的大起大落.     

Sectoral and aggregate technology growth in Spain

In this paper we analyze technological change in the Spanish economy by constructing adjusted Solow residuals, where the adjustment attempts to correct for the bias associated with the potential presence of imperfect competition, increasing returns, variable input utilization and, especially, sectoral reallocation of inputs across sectors. We refer to this modified Solow residual as a technology index. Sectoral reallocations and variable input utilization are key determinants of the differences between the aggregate Solow residual and the technology index resulting from the aggregation of estimated sectoral technological growth. We show that starting in the mid nineties, there has been a deceleration in the aggregate growth rate of technology which is basically due to the behaviour of the manufacturing sectors. Finally, our results imply that aggregate technology growth is less volatile than aggregate productivity as measured by the Solow residual.     

Growth management and housing prices: the case of Portland, Oregon

Portland, Oregon, is well known for its relatively unique urban growth boundary (UGB), a very tight form of zoning designed to control sprawl. The UGB has recently been criticized for raising housing prices. From a theoretical perspective, the UGB will put upward pressure on land and thus housing prices, but the magnitude of this effect is uncertain. Increasing density should substitute for higher land prices, partially offsetting any reduction in the supply of housing. In addition, at any given moment, speculative factors influence housing price levels in bull markets such as the one Portland has been experiencing. This article presents an econometric analysis assessing these conflicting effects. We find the UGB has created upward pressure on housing prices, but the effect is relatively small in magnitude.     

Sectoral and Aggregate Technology Shocks:Is There a Relationship?

We analyze sector-specific shocks in productivity and demand in 19 manufacturing sectors of the Austrian economy. Based on a structural vector autoregressive model (SVAR) with long-run restrictions developed by Galí (1999) we extract technology and non-technology shocks from sectoral and aggregate data. We study their patterns and relationship by means of a principal components analysis and find a close association of sectoral and macroeconomic non-technology shocks but only a very weak association for technology shocks. Impulse response analysis indicates that for almost all manufacturing sectors as well as the aggregate Austrian economy productivity growth rates experience an immediate increase due to positive technology shocks while hours worked decline. Thereby we confirm Galís results on the level of Austrian manufacturing industries. From regression analysis, we find that our shocks are closely associated to employment growth and output growth but not to investment growth and that the reaction is different for the aggregate economy and manufacturing industries.JEL codes: D24, E23, E32, O30We thank Werner Müller and the participants of the 2004 conference of the Austrian Economic Association (NOeG) for helpful comments. We would like to thank an anonymous referee for many helpful comments that led to a substantial improvement of the paper. The usual disclaimer applies. This research project was supported by a research Grant (Project Nr. 9800) of the Jubiläumsfonds der Österreichische Nationalbank (OeNB).     

Fertility and housing

Young households in Hong Kong face particularly steep increases in house prices and low fertility despite low gender wage gaps. The model of fertility and housing in this paper explains why fertility decline need not reverse as female wages rise relative to male wages where housing land is scarce. For given house prices, demand for children may rise with female relative wages if housing comprises a sufficiently large share of childrearing. If the user cost of housing falls with rising house prices then fertility also rises. For endogenous house prices, however, growth in wages and a burgeoning working age population raises the market price of housing. In turn, fertility no longer rises with female relative wages. The analysis provides a novel mechanism whereby high population support ratios depress fertility and the results fit recent evidence that house prices affect fertility.     

OUTPUT–EMPLOYMENT RELATIONSHIP ACROSS SECTORS: A LONG‐ VERSUS SHORT‐RUN PERSPECTIVE

This paper investigates the nature of the output–employment relationship by using the Turkish quarterly data for the period 1988–2008. Even if we fail to find a long‐run relationship between aggregate output and total employment, there are long‐run relationships for the aggregate output with non‐agricultural employment and sectoral employment levels for seven of nine sectors that we consider. However, a further investigation for the output and employment relationship within a short‐run perspective does not reveal statistically significant relationships for either total employment or non‐agriculture employment, or eight of the nine sectors that we consider. Although there are various long‐run relationships between output and employment, the short‐run links between demand and employment are weak. The various implications of this for the economy and the labour market are discussed. As a result, maintaining high levels of output in the long‐run creating demand is essential for employment generation.     

The implications of heterogeneous resource intensities on technical change and growth

Abstract We analyze the long‐term dynamics of an economy in which sectors are heterogeneous with respect to the intensity of natural resource use. It is shown that heterogeneity induces technical change to be biased towards resource‐intensive sectors. Along the balanced growth path, the sectoral structure of the economy is constant as the higher resource dependency in resource‐intensive sectors is compensated by enhanced research activities. Resource taxes have no impact on dynamics except when the tax rate varies over time. Research subsidies and the sectoral provision of productivity‐enhancing public goods raise growth and provide an effective tool for structural policy.     

The structure of the German economy

Exploiting the information contained in an economy’s input-output matrix and using the novel approach developed by Fisher and Marshall (2011), we calculate Rybczynski effects and Stolper–Samuelson effects for Germany in 2007. We show how sectoral output and factor remuneration react to exogenous changes of factor endowments and product prices, respectively. These calculations are implemented using two different models comprising one with labour and capital as the classical production factors and one where we introduce patent stock as an additional factor of production. In the former, we further differentiate between a scenario where all production factors are mobile and one with sector-specific capital. In the latter analysis, we measure the impact of innovation-targeting policy action for sectoral output. Positive Rybczynski effects of patents and high-skilled workers are strongest in knowledge-intensive sectors, while other sectors contract. The introduction of patents as a further production factor has only minor influence on the Rybczynski effects of other factors.     

Wealth effects on the housing markets: Do market liquidity and market states matter?

This paper analyzes the effect of household wealth (including housing and financial wealth) on housing sales and probes their long-run and short-run dynamic relationships. We further examine the short-run effect of financial wealth on housing sales by employing quantile regressions, restricted upon different liquidity (quantile) levels and up-down housing markets, from which the differences between the early and late stages of an uptrend/downtrend can be respectively exhibited. We find that housing wealth, income, and mortgage rates have long-run influences on housing sales. Looking at the short run, we find that housing sales only respond to housing wealth and mortgage rates. When we distinguish the effects of financial wealth on housing sales in up-down housing markets, we note a positive influence of financial wealth on housing sales in down markets, but not in up markets. Particularly, our results show an impact of housing liquidity on the short-run relationships.     

Financial market and housing wealth effects on consumption: a permanent income approach

The objective of this study is to examine the financial market and housing wealth effects on consumption. Housing has the dual functions as both a commodity yielding a flow of housing services and an investment asset yielding a flow of capital income. With the construction of an empirical framework based on the vector autoregression approach, the findings from this study suggest that a rise in housing price has both a positive wealth effect and a negative price effect on consumption. While the positive wealth effect is caused by an increase in capital income, the negative price effect is caused by an increase in the cost of housing services. In addition, the housing market wealth effect increases, at the expense of the price effect, with the level of housing-market leverage. These findings imply that the government policy of land supply aiming to stimulate the economy should strike a balance between the possible wealth and price effects of the housing market.     

Labor-Leisure Choice and Relative Income Concerns in the Shadow of the Housing Market

We theoretically examine the connection among labor productivity, work time, and housing costs in an economy with households differing in wages and neighborhoods differing in quality. We argue that the location rent component of housing cost is key to explicating the connection. We trace how the housing market makes relative income instrumental for maximizing utility even if households’ utility functions are not interdependent. Over time, productivity growth yields higher wages but households compete some of that away on the housing market. This structural inflation of location rents counteracts preferences to work less as wages rise and hinders the expansion of leisure. Relative income effects are shown to arise as a consequence of a market institution that monetizes socially-imbued preferences.