Winners and Losers in Housing Markets

Nobuhiro Kiyotaki, Alexander Michaelides, Kalin Nikolov

Research output: Contribution to journalArticlepeer-review

129 Scopus citations


This paper is a quantitatively oriented theoretical study into the interaction between housing prices, aggregate production, and household behavior over a lifetime. We develop a life-cycle model of a production economy in which land and capital are used to build residential and commercial real estates. We find that in an economy where the share of land in the value of real estates is large, housing prices react more to an exogenous change in expected productivity or the world interest rate, causing a large redistribution between net buyers and net sellers of houses. Changing financing constraints, however, has limited effects on housing prices.

Original languageEnglish (US)
Pages (from-to)255-296
Number of pages42
JournalJournal of Money, Credit and Banking
Issue number2-3
StatePublished - Mar 2011

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics and Econometrics


  • Collateral constraints
  • Housing prices
  • Land
  • Life cycle
  • Real estate


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