Housing, Distribution, and Welfare

Nobuhiro Kiyotaki, Alexander Michaelides, Kalin Nikolov

Research output: Contribution to journalArticlepeer-review


Housing is a long-lived asset whose value is sensitive to variations in expectations of long-run growth rates and interest rates. When a large fraction of households has leverage, housing price fluctuations cause large-scale redistribution and consumption volatility. We find that a practical way to insure the young and the poor from the housing market fluctuations is through a well-functioning rental market. In practice, homeownership subsidies keep the rental market small and the housing cycle affects aggregate consumption. Removing homeownership subsidies hurts old homeowners, while leverage limits hurt young homeowners.

Original languageEnglish (US)
JournalJournal of Money, Credit and Banking
StateAccepted/In press - 2024

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics and Econometrics


  • credit constraints
  • distribution
  • housing prices
  • rental markets
  • welfare


Dive into the research topics of 'Housing, Distribution, and Welfare'. Together they form a unique fingerprint.

Cite this