scholarly journals What Do Financial Asset Prices Say About the Housing Market?

2006 ◽  
Vol 2006 (32) ◽  
pp. 1-33
Author(s):  
J. B. Durham ◽  
Keyword(s):  
Housing Market ◽  
Asset Prices ◽  
Financial Asset

Consumption and Housing Wealth in the UK

2003 ◽  
Vol 186 ◽  
pp. 53-56 ◽  
Author(s):  
Ray Barrell ◽  
Amanda Choy ◽  
Rebecca Riley
Keyword(s):  
Housing Market ◽  
Asset Prices ◽  
House Prices ◽  
Pension Funds ◽  
Housing Wealth ◽  
The Past ◽  
Equilibrium Ratio ◽  
Net Assets ◽  
The Uk ◽  
The Relationship

Consumption behaviour in the UK is frequently seen as different from that in other countries. The relationship between the housing market and consumption is discussed at length in HM Treasury (2003). The housing market, which has been particularly cyclically volatile in the past 30 years, has contributed to cycles in consumption through its impact on housing wealth. Increased house prices increase the value of assets held, and impact on consumption, making the economy more cyclical. There is a clear relationship between the level of real financial plus housing net wealth as a proportion of income and the savings ratio (excluding adjustment for changes in net equity of households in pension funds), as can be seen from chart 1, where we plot the stock of total net assets over the flow of income to indicate just how much ‘cover’ the personal sector has on its current commitments. When wealth rises, for instance because real asset prices have risen, then individuals find themselves with more assets than they need and increase their consumption in order to return their assets to their equilibrium ratio to income. Clearly this process is not instantaneous, but cycles in wealth driven by house prices could have contributed to the cyclical nature of overall demand in the UK in the past 30 years.

scholarly journals Household Balance Sheets and the Recovery

2011 ◽  
pp. 1-6
Author(s):  
Timothy Bianco ◽  
Filippo Occhino
Keyword(s):  
Business Cycles ◽  
Asset Prices ◽  
Balance Sheet ◽  
Financial Asset ◽  
Balance Sheets

Falling home and financial asset prices have combined to weaken the average household’s balance sheet, and this has helped to slow down the current recovery. We examine the role that household balance sheets have typically played in postwar business cycles and assess their importance in explaining why some recoveries, including the current one, have been weaker than others.

A Competitive Approach to Financial Issues

2014 ◽  
pp. 385-398
Author(s):  
Mustafa Okur ◽  
A. Osman Gurbuz
Keyword(s):  
Financial Markets ◽  
Asset Prices ◽  
Abnormal Returns ◽  
Efficient Market Hypothesis ◽  
Future Research ◽  
Financial Asset ◽  
Efficient Market ◽  
Finance Theory ◽  
Available Information ◽  
Financial Issues

Efficient Market Hypothesis (EMH) is a cornerstone in modern finance theory. Efficient market hypothesis states that it is impossible to make abnormal returns in financial markets because financial asset prices always reflect all available information. This chapter was undertaken in order to give a brief survey of modern finance theory by mainly focusing on the efficient market hypothesis. The authors also discuss the empirical foundations of the efficient market hypothesis. Finally, the main challenges to the efficient market hypothesis are introduced in order to point out a perspective for future research.

scholarly journals Price Discovery in Illiquid Markets: Do Financial Asset Prices Rise Faster Than They Fall?

2010 ◽  
Vol 65 (5) ◽  
pp. 1669-1702 ◽  
Author(s):  
RICHARD C. GREEN ◽  
DAN LI ◽  
NORMAN SCHÜRHOFF
Keyword(s):  
Asset Prices ◽  
Price Discovery ◽  
Financial Asset ◽  
Illiquid Markets

scholarly journals Long Memory in Exchange Rate Volatility

2021 ◽  
Author(s):  
Aysu Yaşar ◽  
Kenan Terzioğlu
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Long Memory ◽  
Asset Prices ◽  
Market Price ◽  
Exchange Rate Volatility ◽  
Financial Asset ◽  
Model Structure ◽  
Continuous Stream ◽  
The Exchange Rate

Considering rapidly evolving technology and effective markets, wherein information and news are quickly and effectively reflected in financial asset prices, the positions of investors trading in financial markets regarding financial asset prices vary according to the continuous stream of information coming to the market. However, markets are not fully efficient in terms of maintaining a long memory that enables future pricing estimates based on the past market price of the financial asset. Revealing the existence of a long memory structure is essential to the development of monetary policies since exchange rates that tend to return to average exert high resistance. In this study, the exchange rate’s long-range dependence is determined in the scope of the log-periodogram estimator and using a fractional model structure, the average model, and the variance model structure related to the exchange rate between February 22, 2001–March 16, 2020 are examined. In this context, the parameters in the model allow an examination of the long memory process. According to the fractionally integrated exponential generalized autoregressive conditional heteroskedasticity model, it is determined that the effects of shocks in the exchange rate market continue and persist for a long period. Policy suggestions within the scope of exchange rates are evaluated within model outputs.

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