Discussion Paper Details

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Title: Location, Location, Location: Manufacturing and House Price Growth

Author(s): Nir Jaimovich, Stephen Terry and Nicolas Vincent

Publication Date: October 2020

Keyword(s): House Prices, housing inequality and Manufacturing decline

Programme Area(s): Macroeconomics and Growth and Monetary Economics and Fluctuations

Abstract: Exploiting data on tens of millions of housing transactions, we show that (1) house prices grew by less in manufacturing-heavy US regions and (2) that this pattern is especially present for the lowest-value homes. Counterfactual accounting exercises reveal that regional differences in the growth of these lowest-value homes more than fully account for an observed increase in overall house price inequality. We conclude that the relative economic decline of manufacturing- heavy areas extends far beyond income and employment flows to include shifts in important local asset prices, a pattern which matters for total house price inequality.

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Bibliographic Reference

Jaimovich, N, Terry, S and Vincent, N. 2020. 'Location, Location, Location: Manufacturing and House Price Growth'. London, Centre for Economic Policy Research.