House Price Synchronization an Financial Openness
IMF Working Paper
Download Document| Date Published | 2018 |
| Version | |
| Primary Author | Mitsuru Katagiri |
| Other Authors | |
| Theme | House Price Indices |
| Country |
Abstract
This paper investigates the developments in house price synchronization across countries by a dynamic factor model using a country- and city-level dataset, and examines what drives the synchronization. The empirical results indicate that: (i) the degree of synchronization has been rising since the 1970s, and (ii) a large heterogeneity in the degree of synchronization exists across countries and cities. A panel and cross-sectional regression analysis show that the heterogeneity of synchronization is partly accounted for by the progress in financial and trade openness. Also, the city-level analysis implies that the international synchronization is mainly driven by the city-level connectivity between large and international cities.