Intrinsic Cycles of Land Price: A Simple Model
Year: 2006
Type: article
Abstract: The cyclicality and volatility of property prices have been extensively documented. Many explanations have been proposed. This paper builds a simple dynamic general equilibrium model in which these often cited channels are assumed away. Instead, the role of intertemporal elasticity of substitution is highlighted. In this model, the land price can exhibit price cycles. Moreover, the land price always fluctuates more than the aggregate output. The welfare of different cohorts depends crucially on the land price at the period they were born. The implications of these results are discussed.
Source: Journal of Real Estate Research
Authors: Charles Leung, N-K. Chen
Institutions: City University of Hong Kong, National Taiwan University
Language: English
Topic: Economic theories and models
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2137291659