Trends and Cycles of Tech-Pole Housing Prices
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Abstract
This paper examines the transmission mechanism of tech-pole housing pricesand investigates the economic forces behind it. For this purpose, the work develops anMCMC algorithm to extract the latent common trend and cycle of the integrating pricesand conduct Bayesian stochastic search for restriction selection of the panel data model.The evidence shows that the transmission magnitude and persistence depend importantlyon the degree of IT-industry intensity between two metropolitan areas. While the commonstochastic trend behind the price dynamics is primarily determined by normal income, themonetary policy is responsible for the common boom and bust of tech-pole housingcycles. The policy implication for the real asset pricing and risk hedging strategies arealso discussed. (E32, R31, C11, C32)