and nominal interest rates are low. Our model features long-term debt, housing transaction costs and a zero-lower bound …

cycles in housing markets. There is a large growing literature exploring two different approaches: on the one hand, a boom …–bust in house prices can generate a boom–bust in credit market and, on the other hand, a boom–bust in credit markets can … housing prices and credit markets and explore these two channels in a mechanical way. Next, we present two simple models that …