Borrowing constraints and housing market liquidity

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A1 Alkuperäisartikkeli tieteellisessä aikakauslehdessä
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Authors

Date

2018-01

Department

Department of Economics

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Language

en

Pages

Series

Review of Economic Dynamics, Volume 27, pp. 184-204

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.

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Tähän voi tallentaa cc-lisenssillä lopullisen version artsusta, kun siinä on sivu ym. tiedot. /Maria Söderholm

Keywords

Borrowing constraint, Housing, Matching

Other note

DOI

10.1016/j.red.2017.07.003

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

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https://urn.fi/URN:NBN:fi:aalto-201809044936

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[article-cris] Kauppakorkeakoulu / BIZ