This paper describes a quantitative model developed to understand the key determinats of house prices boom-and-bust cycles. The key driving forces behind the boom are residential investment, immigration, current account deficits, relaxation of downpayment constraints, and the elimination of land...

We construct a dynamic general equilibrium model of cities and use it to estimate the effect of local agglomeration on per capita consumption growth. Agglomeration affects growth through the density of economic activity: higher production per unit of land raises local productivity. Firms take...