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Jahrbücher für Nationalökonomie und Statistik

Journal of Economics and Statistics

Editor-in-Chief: Winker, Peter

Ed. by Büttner, Thiess / Riphahn, Regina / Smolny, Werner / Wagner, Joachim


IMPACT FACTOR 2018: 0.200
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2366-049X
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Volume 239, Issue 4

Issues

Regulating Speculative Housing Markets via Public Housing Construction Programs: Insights from a Heterogeneous Agent Model

Carolin Martin / Frank Westerhoff
Published Online: 2019-03-19 | DOI: https://doi.org/10.1515/jbnst-2018-0042

Abstract

Since the instability of housing markets may be quite harmful for the real economy, we explore whether public housing construction programs may tame housing market fluctuations. As a workhorse, we use a behavioral stock-flow housing market model in which the complex interplay between speculative and real forces triggers reasonable housing market dynamics. Simulations reveal that plausible and well-intended policy measures may turn out to be a mixed blessing. While public housing construction programs may reduce house prices, they seem to be incapable of bringing house prices much closer towards their fundamental values. In addition, these programs tend to drive out private housing constructions.

Keywords: housing markets; boom-bust dynamics; extrapolative and regressive expectations; heterogeneous agent models; policy experiments; public housing construction programs

JEL Classification: D84; R21; R31

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About the article

Received: 2018-05-16

Revised: 2018-09-26

Accepted: 2018-11-20

Published Online: 2019-03-19

Published in Print: 2019-07-26


Citation Information: Jahrbücher für Nationalökonomie und Statistik, Volume 239, Issue 4, Pages 627–660, ISSN (Online) 2366-049X, ISSN (Print) 0021-4027, DOI: https://doi.org/10.1515/jbnst-2018-0042.

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