House prices and labour productivity growth: Evidence from OECD countries

Abstract

This study examines the association between real house prices and labour productivity growth in 24 OECD countries over the period 1972–2019. By applying the panel fixed effects and Pooled Mean Group-Autoregressive Distributed Lag (PMG-ARDL) estimators, the results show that labour productivity growth is negatively and significantly associated with real house prices. This finding provides empirical support for the ongoing discussion on the adverse impact of excessive housing market activities on productivity.