Borrowing constraints and housing market liquidity
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Journal Title
Journal ISSN
Volume Title
A1 Alkuperäisartikkeli tieteellisessä aikakauslehdessä
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Author
Date
2018-01
Major/Subject
Mcode
Degree programme
Language
en
Pages
184-204
Series
Review of Economic Dynamics, Volume 27
Abstract
We study how changes in household borrowing constraints influence housing market liquidity. To this end, we develop a housing market model with both matching and credit frictions. In the model, risk-averse households may save or borrow in order to smooth consumption over time and finance owner housing. Prospective sellers and buyers meet randomly and bargain over the price. In the model, housing market liquidity is very sensitive to changes in household credit conditions. In particular, a moderate tightening of household borrowing constraints increases the average time-on-the-market and idiosyncratic price dispersion substantially.Description
Tähän voi tallentaa cc-lisenssillä lopullisen version artsusta, kun siinä on sivu ym. tiedot. /Maria Söderholm
Keywords
Borrowing constraint, Housing, Matching
Citation
Eerola , E & Määttänen , N 2018 , ' Borrowing constraints and housing market liquidity ' , Review of Economic Dynamics , vol. 27 , pp. 184-204 . https://doi.org/10.1016/j.red.2017.07.003
