Effect of House Prices on Economic Growth
The differences in growth rates of EU countries in the 1995-2003 period can be attributed largely to the development of house prices and their effect on residential construction and private consumption. Rising real estate prices in the Anglo-Saxon and Northern European countries accelerated residential construction activities and also had a stimulating effect on private consumption through wealth effects. In market-based financial systems such as in Great Britain or Northern Europe, reactions are clearly stronger than in bank-based systems such as in continental Europe. Despite the success achieved on a medium-term basis by many countries with flexible real-estate markets and market-based financial systems, a long-term growth strategy should not be based on these instruments, for soaring property prices tend to be followed by a downturn affecting the economy as a whole.
Year of publication: |
2005
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Authors: | Marterbauer, Markus ; Walterskirchen, Ewald |
Published in: |
WIFO Monatsberichte (monthly reports). - Österreichisches Institut für Wirtschaftsforschung (WIFO), ISSN 0029-9898. - Vol. 78.2005, 11, p. 761-774
|
Publisher: |
Österreichisches Institut für Wirtschaftsforschung (WIFO) |
Description of contents: | Abstract [wifo.ac.at] |
Keywords: | Hauspreise Wohnungspreise Wohnimmobilien Immobilienmarkt Immobilienvermögen Finanzvermögen Privater Konsum Wirtschaftswachstum |
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