House price distortions slow European growth – Estonian paper
Misaligned prices amplify business cycles in short run but damage growth over long run – researchers
Misalignments in house prices have slowed economic growth in several European countries, a working paper by the Estonian central bank finds.
In House price misalignments and economic growth in Europe, Juan Carlos Cuestas, Merike Kukk and Natalia Levenko look at data from 20 European Union countries from 2004 to 2018. They attempt to estimate the long-term relationship between house prices and a range of economic fundamentals in these countries.
Income has been the main fundamental factor
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