Template-Type: ReDIF-Paper 1.0
Author-Name: Sebastian Doerr
Author-X-Name-First: Sebastian
Author-X-Name-Last: Doerr
Title: Housing booms, reallocation and productivity
Abstract: I establish that US public firms holding real estate have persistently lower levels of productivity than non-holders. Rising real estate values relax collateral constraints for companies that own real estate and allow them to expand production. Consequently, an increase in house prices reallocates capital and labor towards inefficient firms, with negative consequences for aggregate industry productivity. Industries with a stronger relative increase in real estate values see a significant decline in total factor productivity, and the within-industry covariance between firm size and productivity declines. My results suggest a novel channel through which real estate booms affect productivity and have implications for monetary policy.
Length: 24 pages
Creation-Date: 2020-11
File-URL: https://www.bis.org/publ/work904.pdf
File-Format: Application/pdf
File-Function: Full PDF document
File-URL: https://www.bis.org/publ/work904.htm
File-Format: text/html
Number: 904
Keywords: housing boom, collateral, misallocation, productivity, low interest rates
Classification-JEL: D22, D24, O16, O47, R3
Handle: RePEc:bis:biswps:904