Das House-Kapital: A Theory of Wealth-to-Income Ratios

Konferenzbeitrag

This paper presents a novel dynamic general equilibrium model to examine the evolution of two major wealth-to-income ratios - housing wealth and non-residential wealth - in advanced countries since WWII. Our theory rests on three premises: (1) the overall land endowment is fixed; (2) the production of new houses requires land as an essential input; (3) land employed for real estate development must be permanently withdrawn from alternative uses. The model distinguishes, for the first time, between the extensive and the intensive margin of housing production. The calibrated model replicates the post WWII increase in the two major wealth-to-income ratios. It also suggests a moderate further increase in wealth-to-income ratios that is associated with a considerable future surge in land prices and house prices. Higher population density and technological progress do, however, not affect long run wealth-to-income ratios. The model also accounts for the close connection of house prices to land prices in the data.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Beiträge zur Jahrestagung des Vereins für Socialpolitik 2016: Demographischer Wandel - Session: Growth and Inequality ; No. G09-V1

Classification and Topics

• Classification: Wirtschaft ; General Aggregative Models: General ; Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy: General (includes Measurement and Data) ; Economic Growth and Aggregate Productivity: General

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Steger, Thomas Michael ; Grossmann, Volker
• Event: Veröffentlichung
• (who): ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft
• (where): Kiel und Hamburg
• (when): 2016

Further information

• Handle: http://hdl.handle.net/10419/145936
• Last update: 10.03.2025, 11:44 AM CET