Abstract
This study aims to determine whether there is convergence in house prices across a sample of European economies, including members and non-members of the Eurozone. Overall the literature has found no evidence of convergence of house prices across Europe. Using data from twelve countries over the time period 2004Q2 to 2016Q3 we test for the null hypothesis of convergence against an alternative of divergence (or club convergence) and apply a Bayesian dynamic panel model to determine house price dynamics and drivers. The results suggest the presence of five housing market clubs across Europe but there is no evidence of a Eurozone club. In addition we find that the main determinants of real house prices are mainly fiscal factors and unemployment. Given the significance of housing markets to the economy and stability of the financial system, the Eurozone may wish to consider measures that facilitate convergence across members’ housing markets.
| Original language | English |
|---|---|
| Article number | 105595 |
| Number of pages | 11 |
| Journal | Economic Modelling |
| Volume | 103 |
| Early online date | 12 Jul 2021 |
| DOIs | |
| Publication status | Published - 31 Oct 2021 |
Bibliographical note
Funding Information:The authors would like to thank Mack and Martinez-Garcia (2011) for the use of their dataset. We would also like to thank the Editor and two anonymous referees for their constructive and helpful comments, the usual disclaimer applies. Javier Ordóñez dedicates this article to his father, in memoriam. We are grateful for the financial support received from the Generalitat de Catalunya grant 2017SGR656 (Maynou), Generalitat Valenciana grant PROMETEO/2018/102 (Ordóñez) and the Universitat Jaume I research project UJI-B2020-26 (Monfort and Ordóñez).
Funding Information:
The authors would like to thank Mack and Martinez-Garcia (2011) for the use of their dataset. We would also like to thank the Editor and two anonymous referees for their constructive and helpful comments, the usual disclaimer applies. Javier Ord??ez dedicates this article to his father, in memoriam. We are grateful for the financial support received from the Generalitat de Catalunya grant 2017SGR656 (Maynou), Generalitat Valenciana grant PROMETEO/2018/102 (Ord??ez) and the Universitat Jaume I research project UJI-B2020-26 (Monfort and Ord??ez).
Funding
The authors would like to thank Mack and Martinez-Garcia (2011) for the use of their dataset. We would also like to thank the Editor and two anonymous referees for their constructive and helpful comments, the usual disclaimer applies. Javier Ordóñez dedicates this article to his father, in memoriam. We are grateful for the financial support received from the Generalitat de Catalunya grant 2017SGR656 (Maynou), Generalitat Valenciana grant PROMETEO/2018/102 (Ordóñez) and the Universitat Jaume I research project UJI-B2020-26 (Monfort and Ordóñez). The authors would like to thank Mack and Martinez-Garcia (2011) for the use of their dataset. We would also like to thank the Editor and two anonymous referees for their constructive and helpful comments, the usual disclaimer applies. Javier Ord??ez dedicates this article to his father, in memoriam. We are grateful for the financial support received from the Generalitat de Catalunya grant 2017SGR656 (Maynou), Generalitat Valenciana grant PROMETEO/2018/102 (Ord??ez) and the Universitat Jaume I research project UJI-B2020-26 (Monfort and Ord??ez).
Keywords
- Convergence
- European union
- House prices
ASJC Scopus subject areas
- Economics and Econometrics
