This paper shows that rising real estate prices reduce industry productivity, because they lead to a reallocation of capital and labor towards inefficient firms. I establish that the rise in real estate value during the US housing boom relaxes firms' financial constraints. Companies borrow...

This thesis consists of three independent chapters which all revolve around the investment decisions of households on the housing market. Although the chapters vary in method and subject, they all emphasize the distributional consequences of a policy or business cycle uctuation.