Aggregate housing demand shocks are an important source of house price fluctuations in the standard macroeconomic …-rent puzzle”). We build a tractable heterogeneous-agent model that provides a microeconomic foundation for housing demand shocks …. The model predicts that a credit supply shock can generate large comovements between the house price and the price …

during busts. The standard model of housing demand treats housing as a quantity of "housing services", an imaginary …

exogenous demand shock to the housing market. Employing a two-step difference-in-differences approach, we find significantly …

. The model shows that a negative demand shock can facilitate cartel formation despite lowering collusive profits. This is … shape competition by investing into production capacity while being subject to unexpected demand shocks with persistence … because lower demand reduces capacity utilization and makes competition more intense especially when capacities are durable …