Using a sample of developed and developing nations (including China and Hong Kong), this study examines the financial market and housing wealth effects on consumption. Housing performs the dual functions as both a commodity providing a flow of housing services and an investment providing a flow...

If the only difference between cities lies in their initial housing prices, the initially lower-price cities should eventually catch up with the initially higher-price ones, i.e., “absolute convergence.” Alternatively, if the major determinants of housing prices are city-specific, cities...