The Evidence and Impact of Financial Globalization

Chapter 41

Housing Is the Business Cycle

E.E. Leamer

UCLA, Los Angeles, CA, USA

Outline

Introduction to the Revision

Introduction

Housing and Academic Macroeconomics

WARNING: Causal Conclusions from Temporal Orderings

Summary

The 3–3 Rule of US Real GDP

Temporal Orderings of Components of GDP

Residential Investment is a Small Part of Long-Term Growth

The Residential Investment Contribution to US Recessions is Huge

A summary table

Average cumulative abnormal contribution: seven consumer cycles

What about False Positives?

Multivariate Confirmation: It is a Consumer Cycle, not a Business Cycle

Hormones and Housing: It has been a Volume Cycle, not a Price Cycle

Sales Prices and Volumes of New and Existing Homes in Los Angeles

New Homes Nationwide have ...