Abstract
Over the last three decades, investment in residential construction has been subject to marked cycles in many industrialized countries. There are two arguments in favour of anticyclical monetary or fiscal policies. First, it has been argued that the cycles in housing construction tend to destabilize the economy, while creating inefficiencies in the housing construction industry by forcing temporary suspension of inputs such as labor and construction equipment. Secondly, cyclicality presumably causes higher housing costs and therefore raises questions of consumer welfare and equity. In addition, there is some empirical evidence to support the view that investment in residential construction is a leading indicator of the business cycle, and that monetary impulses are transmitted to housing construction first. Apart from the disequilibrium estimation, the emphasis of this chapter is on the question of whether monetary impulses are indeed transmitted to investment spending through interest rates as well as through interest rate and inflation expectations.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Beguelin, J.-P., H.-J. Büttler, and K. Schiltknecht (1983): “A First Look at Entropy, Monetary Policy, and Expected Inflation Rates in the Determination of Exchange Rates”, in L.R. Klein and W.E. Krelle (eds): Capital Flows and Exchange Rate Determination, Wien: Springer-Verlag.
Büttler, H.-J. (1972): Die Teuerung verschiedener Bauwerke sowie die Preisentwicklung auf verschiedenen Baumärkten der Schweiz in den Jahren 1946 bis 1971, Bericht Nr. 2, Institut für Bauplanung und Baubetrieb, Eidgenössische Technische Hochschule, 2. edition 1978.
Büttler, H.-J. (1975): Eine empirische Untersuchung der privaten und öffentlichen Brutto-Bauinvestitionen der Schweiz sowie des Boden- und Vohnungsmarktes von Bern, Zürich und Basel in den Jahren 1948 bis 1971, Bern: Paul Haupt.
Büttler, H.-J. und K. Schiltknecht (1985): “Eine empirische Untersuchung der schweizerischen Wohnbautätigkeit”, in Wohnungsnot bei Wohnungsüberangebot?, Mannheim: Wissenschaftsverlag Mannheim.
Chinloy, Peter T. (1980): “An Empirical Model of the Market for Resale Houses”, Journal of Urban Economics, (7):279–92.
Diewert W.E. (1982): “Duality Approaches to Microeconomic Theory”, in K.J. Arrow and M.D. Intriligator (eds): Handbook of Mathematical Economics, Volume II, 533–599, Amsterdam: North-Holland Publishing Company.
Evans, Michael K. (1969): Macroeconomic Activity, New York: Harper & Row.
Goldfeld, Stephen M., Dwight M. Jaffee, and Richard E. Quandt (1980): “A Model of FHLBB Advances: Rationing or Market Clearing?”, The Review of Economics and Statistics, LXII: 339–347.
Henderson, J. Vernon (1977): Economic Theory and the Cities, New York: Academic Press.
Intriligator, Michael D. (1971): Mathematical Optimization and Economic Theory, Englewood Cliffs: Prentice Hall.
Kugler, Peter (1985): “Ungleichgewichtsökonometrie für den schweizerischen Hypothekarzinssatz”, Schweizerische Zeitschrift für Volkswirtschaft und Statistik, 121(1): 35–44.
Muth, John F. (1960): “Optimal Properties of Exponentially Weighted Forecasts”, Journal of the American Statistical Association, 55: 299–306.
Rosen, Kenneth T. and L.B. Smith (1983): “The Price-Adjustment Process for Rental Housing and the Natural Vacancy Rate”, Amer i can Economic Review, 83(4): 779–785.
Samuelson, Paul A. (1969): “Lifetime Portfolio Selection by Dynamic Stochastic Programming”, Review of Economics and Statistics, (51): 239–246.
Schelbert, H. (1962): Die Ursachen der kurzfristigen Schwankungen der Wohnbautätigkeit im Marktgebiet von Zürich in den beiden Perioden um 1929 bis 1945 und 1946 bis 1959, Zürich: Polygraphischer Verlag.
Schiltknecht, K. und P. Stopper (1972): “Die kurzfristigen Bestimmungsgründe der Wohnbautätigkeit in den Nachkriegsjahren”, Schweizerische Zeitschrift für Volkswirtschaft und Statistik, 108(1): 21–31.
Author information
Authors and Affiliations
Rights and permissions
Copyright information
© 1986 Springer-Verlag Berlin Heidelberg
About this chapter
Cite this chapter
Büttler, HJ., Frei, G., Schips, B. (1986). Investment in Residential Construction. In: Estimation of Disequilibrium Models. Lecture Notes in Economics and Mathematical Systems, vol 279. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-48340-0_4
Download citation
DOI: https://doi.org/10.1007/978-3-642-48340-0_4
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-540-16817-1
Online ISBN: 978-3-642-48340-0
eBook Packages: Springer Book Archive