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Housing Markets and Current Account Dynamics
2010
Social Science Research Network
This paper makes two contributions. On the theory side, I show that increases in the demand for housing may generate trade de...cits without need for the standard ingredients used by others to model housing (wealth e¤ects or trade in capital goods). Housing is a durable good that must be locally produced. If the desire to smooth consumption across goods is su¢ ciently strong, countries import tradable goods during periods when more domestic labor is devoted to produce nontradables to smooth
doi:10.2139/ssrn.1558512
fatcat:shwc3a2tknechgptk3tswkvspa