Housing, distribution and welfare
File(s)
Accepted version
Author(s)
Kiyotaki, Nobuhiro
Michaelides, Alexander
Nikolov, Kalin
Type
Journal Article
Abstract
Housing is a long-lived asset whose value is sensitive to variations in expectations of long-run growth rates and interest rates. When a large fraction of households has leverage, housing price fluctuations cause large-scale redistribution and consumption volatility. We find that a practical way to insure the young and the poor from the housing market fluctuations is through a well-functioning rental market. In practice, homeownership subsidies keep the rental market small and the housing cycle affects aggregate consumption. Removing homeownership subsidies hurts old homeowners, while leverage limits hurt young homeowners.
Date Issued
2024-08-01
Date Acceptance
2023-01-27
Citation
Journal of Money, Credit and Banking, 2024, 56 (5), pp.981-1020
ISSN
0022-2879
Publisher
Wiley
Start Page
981
End Page
1020
Journal / Book Title
Journal of Money, Credit and Banking
Volume
56
Issue
5
Copyright Statement
© 2024 The Ohio State University. This is the peer reviewed version of the following article, which has been published in final form at https://onlinelibrary.wiley.com/doi/abs/10.1111/jmcb.13136. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions. This article may not be enhanced, enriched or otherwise transformed into a derivative work, without express permission from Wiley or by statutory rights under applicable legislation. Copyright notices must not be removed, obscured or modified. The article must be linked to Wiley’s version of record on Wiley Online Library and any embedding, framing or otherwise making available the article or pages thereof by third parties from platforms, services and websites other than Wiley Online Library must be prohibited.
Publication Status
Published
Rights Embargo Date
2025-02-13
Date Publish Online
2024-02-14