Funke, Michael; Paetz, Michael - In: Journal of Housing Economics 22 (2013) 1, pp. 62-76
This paper develops a two-agent, two-sector, open-economy DSGE model with a housing-market sector and a borrowing constraint. Contrary to standard conventions, domestic households are allowed to invest in foreign housing and vice versa. Using Bayesian methods, the model is applied to data for...