Is Housing Activity a Leading Indicator? - Financial and Economic Forecasting (Chapter 12)

23 Pages Posted: 9 Jan 2003

See all articles by Jack H.W. Penm

Jack H.W. Penm

Australian National University - School of Finance and Applied Statistics, Faculty of Economics and Commerce

Jammie H. Penm

Independent

R. Deane Terrell

Australian National University (ANU) - National Graduate School of Management

Date Written: October 2002

Abstract

Economic activity, this useful relationship has not been supported by empirical testing Although housing activity has often been used as a leading indicator of general using econometric procedures. In this chapter, we investigate whether housing activity does prove to be a leading indicator using two dynamic systems. In the national account system, the results indicate that dwelling investment contains leading information for gross national expenditure. In a five-variable system including a measure of economic activity, housing activity, money, prices and a short-term interest rate, housing activity is found to provide an important linkage between economic activity and the rest of the system. These results consistently affirm that housing activity is a leading indicator of general economic activity.

Keywords: Housing activity, leading indicator

JEL Classification: C22, C53, E31

Suggested Citation

Penm, Jack and Penm, Jammie H. and Terrell, R. Deane, Is Housing Activity a Leading Indicator? - Financial and Economic Forecasting (Chapter 12) (October 2002). Available at SSRN: https://ssrn.com/abstract=359941 or http://dx.doi.org/10.2139/ssrn.359941

Jack Penm (Contact Author)

Australian National University - School of Finance and Applied Statistics, Faculty of Economics and Commerce ( email )

Canberra, Australian Capital Territory 0200
Australia
+61 (02) 61250535 (Phone)
+61 (02) 61250087 (Fax)

Jammie H. Penm

Independent ( email )

61 (02) 62880126 (Phone)
61 (02) 61250087 (Fax)

R. Deane Terrell

Australian National University (ANU) - National Graduate School of Management ( email )

Sir Roland Wilson Building (120)
Canberra, Australian Capital Territory 0200
Australia

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