Working Paper: NBER ID: w22354
Authors: Monika Piazzesi; Martin Schneider
Abstract: This paper surveys the literature on housing in macroeconomics. We first collect facts on house prices and quantities in both the time series and the cross section of households and housing markets. We then present a theoretical model of frictional housing markets with heterogeneous agents that nests or provides background for many studies. Finally, we describe quantitative results obtained during the last 15 years on household behavior, business cycle dynamics and asset pricing, as well as boom bust episodes.
Keywords: housing; macroeconomics; business cycles; monetary policy; collateral
JEL Codes: E0; E44; G11; G12; R2; R3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| shocks to financial intermediaries (G21) | housing prices (R31) |
| housing as a consumption good (R21) | household savings and investment decisions (D14) |
| fluctuations in house prices (E32) | household savings and investment decisions (D14) |
| frictions in housing markets (R31) | homeowners bearing property-level price risks (R21) |
| homeowners bearing property-level price risks (R21) | consumption and savings behavior (E21) |
| financial frictions (G19) | transmission of shocks across the economy (E44) |
| housing markets (R31) | macroeconomic dynamics (E19) |
| models incorporating frictions (F12) | accurate representation of macroeconomic phenomena (E13) |