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I model global imbalances as arising from changes in preferences for housing relative to tradable goods. The key ingredients in the model are labor reallocation across sectors and consumption smoothing between housing and tradable goods. Countries import goods during periods when more domestic labor is devoted to housing construction. Housing booms are larger in countries that can run trade de...cits. This occurs despite the absence of wealth e¤ects, and even if trade is not primarilydoi:10.2139/ssrn.1558512 fatcat:shwc3a2tknechgptk3tswkvspa