The Relationship between Housing Prices and Macroeconomic Factors in Spain
Garrett Fitzgerald1
This paper examines the effects of certain macroeconomic variables (i.e mortgages, inflation, and employment) on the price of houses in Spain. An error correction vector autoregressive (ECVAR) model is used to model the impact of the macroeconomic variables on real housing prices. Variance decompositions will be analyzed to determine the extent to which these variables have an effect on housing prices in Spain.
JEL classification: E32; R20; G00; G11 Keywords: housing, Spain, inflation, employment, mortgages
1
Bryant University, 1150 Douglas Pike, Smithfield, RI 02917. Phone (413) 586-2529, Email: gfitzger@bryant.edu
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The author would like to thank Dr. Ramesh Mohan, Department of Economics, Bryant University, for aiding in the development of this paper.
Empirical Economic Bulletin, Spring 2009, Vol. 2
33
