This paper presents the theory and the evidence showing the close relationship between the performance of the macroeconomy and housing. Focusing on the Hong Kong experience, it is found that exports and the interest rate were two key variables that can explain the movement of housing prices over a long period. A structural break is identified in the first quarter of 1998. Using the cointegration framework, the paper highlights the importance of housing to both the economic health of the domestic sector and the fiscal health of the economy.
|Place of Publication||Hong Kong|
|Publisher||Centre for Public Policy Studies|
|Number of pages||28|
|Publication status||Published - Nov 2003|
|Name||Centre for Public Policy Studies Working Paper Series|
Bibliographical noteSupport from the RGC Grants Committee of Hong Kong (LU3008/00H) is gratefully acknowledged.
HO, L. S., & WONG, G. W. (2003). The nexus between housing and the macro economy : Hong Kong as a case study. (Centre for Public Policy Studies Working Paper Series; No. 143). Centre for Public Policy Studies.