A1 Refereed original research article in a scientific journal
Interaction between housing prices and household borrowing: The Finnish case
Authors: Oikarinen Elias
Publisher: North-Holland
Publication year: 2009
Journal: Journal of Banking and Finance
Journal name in source: JOURNAL OF BANKING & FINANCE
Journal acronym: J BANK FINANC
Volume: 33
Issue: 4
First page : 747
Last page: 756
Number of pages: 10
ISSN: 0378-4266
DOI: https://doi.org/10.1016/j.jbankfin.2008.11.004
Abstract
Employing time series econometrics this study shows that there has been a significant two-way interaction between housing prices and housing loan stock in Finland since the financial liberalization in the late 1980s. Before the financial deregulation the interaction was substantially weaker. Furthermore, housing appreciation has a notable positive impact on the outstanding consumption loan stock. It appears that there is no similar relationship between stock prices and credit. Understanding the two-way interaction between housing prices and credit is of importance, since the interdependence is likely to augment boom-bust cycles in the economy and increase the fragility of the financial sector. (C) 2008 Elsevier B.V. All rights reserved.
Employing time series econometrics this study shows that there has been a significant two-way interaction between housing prices and housing loan stock in Finland since the financial liberalization in the late 1980s. Before the financial deregulation the interaction was substantially weaker. Furthermore, housing appreciation has a notable positive impact on the outstanding consumption loan stock. It appears that there is no similar relationship between stock prices and credit. Understanding the two-way interaction between housing prices and credit is of importance, since the interdependence is likely to augment boom-bust cycles in the economy and increase the fragility of the financial sector. (C) 2008 Elsevier B.V. All rights reserved.
UTU Research Portal