United Kingdom: Selected Issues

March 3, 2003

Preview Citation

Format: Chicago

United Kingdom: Selected Issues, (USA: International Monetary Fund, 2003) accessed November 24, 2024

Summary

This Selected Issues paper examines the factors determining housing prices in the United Kingdom. Based on econometric evidence, the paper assesses whether recent housing price increases can be explained by fundamentals or whether they represent a temporary overshooting of housing prices, characteristic of a bubble. The paper estimates a simple error-correction model that describes the dynamics of real housing prices since the 1970s. Estimation results suggest that earnings and interest rates are the key determinants of housing prices, and that changes in real housing prices exhibit a large degree of persistence.

Subject: Capital productivity, Housing prices, Labor, Labor productivity, Prices, Production, Productivity, Total factor productivity

Keywords: Australia and New Zealand, Capital productivity, CR, Equipment investment, Europe, Housing prices, Investment, Investment ratio, ISCR, Labor productivity, Nominal interest rate, Price, Productivity gap, Right, Total factor productivity, U.K. investment, U.K. productivity performance, U.K. ratio

Publication Details

Pages:

60
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2003/047
Stock No:

1GBREA0022003
ISBN:

9781451814170
ISSN:

1934-7685

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