Abstract
Over the last decade, the Spanish housing market has gained a lot of attention due to its dynamics in house prices and residential investments. Our contribution provides a general framework based on the classical user cost approach. We take an equity constraint explicitly into account when modeling a long-term equilibrium. Against the background of theoretical implications we estimate a vector error correction model and find some evidence for the existence of such a financial constraint.
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More From: International Business & Economics Research Journal (IBER)
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