Abstract
The model of Hendry (1986) is extended to a vector autoregressive system, in order to examine the sources of fluctuations in housing completions and inventory. The time-series properties of the completion rate are examined as well as those of the accumulated inventory. Shocks to income, interest rates, materials price, and housing price are examined. The completion rate appears to be more or less constant, unaffected by these shocks, so that inventory is evidently the control variable for builders.
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Coulson, N.E. Housing Inventory and Completion. The Journal of Real Estate Finance and Economics 18, 89–105 (1999). https://doi.org/10.1023/A:1007789413307
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DOI: https://doi.org/10.1023/A:1007789413307