in The Review of Economic Studies
July 2018; p ublished online October 2017 .
Journal Article. Subjects: Macroeconomics: Consumption, Saving, Production, Employment, and Investment; Prices, Business Fluctuations, and Cycles; Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook; Household Behaviour and Family Economics; Intertemporal Choice and Growth; Household Analysis. 19460 words.
Recent empirical work shows large consumption responses to house price movements. This is at odds with a prominent theoretical view which, using the...