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Housing and the Economy
Johannes Stroebel (NYU Stern)
Housing contributes over 16% to U.S. GDP and is the largest asset on the household sector’s balance
sheet, while the mortgage market constitutes the second largest U.S. credit market, just behind Treasuries
and well ahead of corporate debt. This three-part lecture series is meant to introduce students to a broad
framework for thinking about the drivers of house prices, as well as discusses more cutting-edge research
topics in order to provide students with possible avenues for their own research.
Lecture 1 – Drivers of House Prices - I
Presents key house price facts and introduces an equilibrium model to understand the drivers of house
prices.
Lecture 2 – Drivers of House Prices – II & Research Topics in Housing Markets I
Expands on the equilibrium model of house prices. Discusses important information issues in housing
markets, discusses some recent research by the Professor, and presents an associated research agenda with
suggestions for students.
Lecture 3 -- Research Topics in Housing Markets II
Shows housing markets can be used as a laboratory to understand important features of financial markets
more generally – for example, it discusses how they can be used to back out very long-run discount rates.
Will include a 45-60 minute presentation by Professor Theresa Kuchler on a recent research project that
analyzes expectation formation in housing markets.
Reading List
L1: “Understanding House-Price Dynamics,” Makoto Nakajima http://www.philadelphiafed.org/researchand-data/publications/business-review/2011/q2/brq211_understanding-house-price-dynamics.pdf
L1: “The Geographic Determinants of Housing Supply,” Albert Saiz, Quarterly Journal of Economics,
2010
L1: “Government Intervention in the Housing Market: Who Wins, Who Loses?” Michael Kirker,
Johannes Stroebel and Max Floetotto, 2014.
L2: “Asymmetric Information about Collateral Values,” Johannes Stroebel, Journal of Finance, 2015.
L2: “Testing for Information Asymmetries in Real Estate Markets,” Pablo Kurlat and Johannes Stroebel,
Review of Financial Studies, 2015.
L3: “Very Long-Run Discount Rates,” Stefano Giglio, Matteo Maggiori, Johannes Stroebel, Quarterly
Journal of Economics, 2015.
L3: “Expectation Formation,” Theresa Kuchler and Basit Zafir, 2015.