Charles Ka Yui Leung

Convergence, Endogenous Growth, and Productivity Disturbances

Kelly (1992) has recently shown that evidence on convergence cannot be taken as evidence against endogenous growth in general. This study uses a well-known class of stochastic growth models to show other difficulties with traditional empirical studies of convergence. Key parameters typically cannot be estimated consistently in cross-section regressions. When the parameters are assumed known, implications for convergence are unavailable except under restrictive and economically unmotivated assumptions. Those same assumptions that relate key parameters to cross-country convergence render cross-section regressions impossible to estimate consistently.

Economic growth and increasing house prices

Several cities and countries in Asia and North America have experienced large increases in housing prices. We extend the 1991 paper by S. Rebelo to simulate this situation. We show that growth in real housing prices can result as economic growth persists, even when population growth is zero. Another finding is that reported increases in housing prices might be underestimated. In particular, the growth rate of a relative price index may converge to zero even when house prices in real terms display sustained growth. Copyright 2003 Blackwell Publishers Ltd (a Blackwell Publishing Company)..

TOM: Why isn't Price Enough?

In an efficient market, differences in quality should be fully reflected in differences in price. This paper examines a highly active residential property market and verifies whether housing attributes can explain time on the market (TOM) in addition to prices. In contrast to the previous literature, only the price ratio and inflation factor are found to be critical in affecting TOM. An interpretation of the results is suggested, along with some directions for future research.

Public Housing Units vs. Housing Vouchers: Accessibility, Local Public Goods, and Welfare

We develop a general equilibrium model of residential choice and study the effects of two housing aid policies, public housing units and housing vouchers. Land is differentiated by both residential accessibility and local public goods, and the provision levels of local public goods are determined by property tax revenues and neighborhood compositions. Households differ in their incomes and preferences for local public goods. Housing aid policies are financed by general income taxes. We discuss how the location of public housing units is a fundamental policy variable, in addition to the numbers and sizes of units, and argue that vouchers not only cause less distortion for social welfare compared to public housing, but may also improve overall welfare.

Availability, Affordability and Volatility: The Case of Hong Kong Housing Market

Housing prices in Hong Kong have gained international attention. This study suggests that the housing supply may be insufficient. Consistent with previous studies, we confirm that merely increasing the land supply may not increase the housing supply. We also find preliminary evidence for widening income inequality, which, when combined with unavailability, can lead to unaffordability in the housing market. Given the current housing supply elasticity with respect to price, Hong Kong is not more volatile than major cities in the United States. Thus, improving housing availability and thereby increasing housing supply elasticity, could effectively decrease housing price volatility.

Price Volatility of Commercial and Residential Property

This article studies the relative volatility of commercial and residential property prices. Empirical evidence of commercial property prices being more volatile than the prices of residential property is presented. Models are built following that of Lucas. Theoretical statements are derived to show the exact conditions under which the observations arise. The cases of fixed supply and flexible supply are considered separately.

Mortgage markets worldwide

Preface . Contributors . 1 The Emerging Mortgage Markets in China . Yongheng Deng and Peng Fei . The evolution of the mortgage markets in China. An early assessment of Chinas residential mortgage loans performance. Notes. References. 2 Mortgage Market in India . Piyush Tiwari and Pradeep Debata . Economic overview. Demographic trends and housing stock. Formal mortgage market. Securitization of housing loans. Role of government and recent regulatory reforms. Other developments. Finance to builders. Issues in housing finance: reform agenda. Acknowledgement. Notes. References. 3 Transforming Housing Finance in Japan in the 21st Century . Miki Seko . Introduction. Overview of the Japanese economy, housing markets, the housing finance markets and systems in Japan. Restructuring the public housing loan corporation: causes and possible consequences. Some recent movements in the Japanese housing finance markets and systems: securitization of real estate in Japan. Conclusion. Notes. References. Further reading. 4 Mortgage Market in Singapore . Seow Eng Ong . Housing finance in Singapore. ARM prepayment for private housing. ARM prepayment for public housing. The Central Provident Fund. ARM delinquency and default within the CPF context. Innovations in mortgage products. Conclusion. References. 5 The Israeli Mortgage Market: Mortgage Insurance as a Mechanism for Screening Default Risk . Danny Ben-Shahar, Gilat Benchetrit and Eyal Sulganik . Introduction. Brief review of the Israeli economy and mortgage market. Modelling mortgage insurance as a screening mechanism. Summary. Notes. References. 6 Housing Finance and Mortgage Markets in The Czech Republic, Hungary, Poland, Slovakia and Slovenia . A.R. Ghanbari Parsa and Mohammad Ali Mulazadeh . Introduction. Housing finance. Housing mortgage in a socialist economy. The Czech Republic. Mortgage banking. Hungary. Housing finance system in Hungary. Loan guarantee measures. Poland. Financial institutions. Affordability of mortgage loans. Evolution of housing mortgage loans. The demand for housing and mortgage credit. Short history of mortgage banking. Increasing individual housing loans. Public mortgage bonds. Slovakia. Housing finance. Slovenia. Privatization process. Mortgage loan system in Slovenia. Housing market in Slovenia. Residential loan offered by banking sector. Obstacles of the mortgage loan market in Slovenia. Discussion. Summary and conclusion. Abbreviations. References. 7 The Mortgage Lending Market in Poland . Ewa Kucharska-Stasiak and Magdalena Zaleczna . Introduction. Determinants underlying expansion of the mortgage loan market. The mortgage loan market - a retrospective analysis. Current situation on the mortgage loan market. The loan insurance system. Future of the mortgage loan market. Final comments. Notes. References. 8 Secondary Mortgage Markets in South Africa . Julia Freybote and Viola Karoly . Introduction. Economic and property market fundamentals. Primary mortgage markets. Secondary mortgage markets. Conclusion and outlook. Notes. References. 9 The Mortgage Market in Ghana . Callistus Mahama . Introduction. Contractual agreements in the housing market. Land and property in the development of capital. The housing challenge. State housing policy initiatives. Formal mortgage in Ghana. Features of the mortgage market. The legal framework. The Home Finance Company (HFC). Conclusions. References. 10 Housing Finance in Emerging Economies: Applying a Benchmark from Developed Countries . Ashok Bardhan and Robert H. Edelstein . Introduction. Housing finance and the economy. Russia, India and China: defining similarities and contrasts. Benchmarking. Concluding remarks. Notes. References. 11 Mortgage Finance in Emerging Markets: Constraints and Feasible Development Paths . Bertrand M. Renaud . Introduction. Recurring issues in developing mortgage markets. Types of mortgage systems observed in developing countries. Lessons learned and some strategic priorities. Notes. References. Appendix 1. Appendix 2. Notes to appendices. Index

Unemployment and vacancy in the Hong Kong labour market

This paper combines unemployment and vacancy data to analyse the efficiency of the Hong Kong labour market for the period 1976 to 1997. It is confirmed that the negative relationship between unemployment and vacancy, commonly known as the Beveridge curve, applies to the Hong Kong labour market. There was an inward shift of the Beveridge curve around 1982, which implies falling match frictions since then. Systematic evidence is also found that Hong Kong has been close to full employment, for on average, around 80% of unemployment in the period was due to structural and frictional unemployment with only 20% attributable to cyclical unemployment.

Increasing Wealth and Increasing Instability: The Role of Collateral

In development economics, growth in credit is generally associated with faster long-run growth as financial intermediation improves the efficiency of channeling capital to productive investment. Yet, among developing countries high growth in credit almost always guarantees the outbreak of a financial crisis. The authors attempt to reconcile the two seemingly contradictory facts with an endogenous growth model in which entry to international borrowing entails some significant fixed cost. The poorest countries are excluded from international borrowing because of the fixed cost. The higher-income developing countries will find it optimal to sink the fixed cost to borrow internationally, growing faster as a result, but also become prone to fluctuations arising from shocks to the international financial market.

Relating International Trade to the Housing Market

Studies of tariffs have tended to ignore their impact on housing markets. This paper builds a simple dynamic general-equilibrium model to bridge the gap. The model is consistent with empirical findings that housing prices in several small open economies, and the price of nontradeables relative to tradeables, have increased over time. The model also allows closed-form solutions of the elasticity of the economic growth rate, the housing-stock growth rate, and the housing-price growth rate, with respect to the tariff rate. Other testable implications are generated. Copyright 2001 by Blackwell Publishing Ltd