Three Essays on Housing and Financial Market Frictions

Abstract

With the continued ongoing importance of housing and the financial market in the economy, housing has become an important part of household wealth and the economy, changes in housing that affect household wealth can have a significant influence on the economy. This thesis analyses the interaction between the housing market and the economy. It first explores the crowding-out effect of the housing market on the non-housing sector. Then it analyses the housing and stock price shock through the wealth effect using an Over-Lapping Generation (OLG) structure. Last, using the same OLG structure. this thesis investigates the effect of monetary policy on housing through the housing wealth effect.