Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/212328 
Year of Publication: 
2015
Series/Report no.: 
Bank of Finland Research Discussion Papers No. 20/2015
Publisher: 
Bank of Finland, Helsinki
Abstract: 
​We study the interaction of matching and credit frictions in the housing market. In the model, risk-averse households may save or borrow in order to smooth consumption over time and finance owner housing. Prospective sellers and buyers meet randomly and bargain over the price. We analyze how borrowing constraints influence house price determination in the presence of matching frictions. We also show that credit frictions greatly magnify the effects of matching frictions. For instance, in the presence of matching frictions, a moderate tightening of the borrowing constraint increases idiosyncratic price dispersion and the average time-on-the-market substantially.
JEL: 
E21
R21
C78
Persistent Identifier of the first edition: 
ISBN: 
978-952-323-067-5
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.