Is Housing Activity a Leading Indicator? - Financial and Economic Forecasting (Chapter 12)
23 Pages Posted: 9 Jan 2003
Date Written: October 2002
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: Suggested Citation