Publications

Rising house prices have a positive impact on real GDP through the consumption effect and the construction of new houses (housing investment). Basically, the strength of this positive effect relies on a large share of homeowners (especially regarding the consumption effect). At the same time, however, a greater share of homeowners could encourage unemployment (the so-called “Oswald hypothesis”), thus damaging economic growth. This theoretical paper includes the link between housing tenure and job-search intensity in the relation between housing prices and growth. The main finding of this work is that homeownership may either reinforce or resize the effect of housing prices on economic growth.