Causality between Land Price Increase and Macroeconomic Variables (Written in Korean)
Despite concerns about rapid land price increases, few attempts have been made to understand its causes and effects, which may justify government intervention or identify policy targets. This paper applies the Granger Causality test to establish causal relationship between the land price increase an...
| Main Author: | |
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| Format: | Article |
| Language: | English |
| Published: |
Korea Development Institute
1991-10-01
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| Series: | KDI Journal of Economic Policy |
| Online Access: | https://doi.org/10.23895/kdijep.1991.13.3.55 |
| _version_ | 1818190794905878528 |
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| author | 손, 재영 |
| author_facet | 손, 재영 |
| author_sort | 손, 재영 |
| collection | DOAJ |
| description | Despite concerns about rapid land price increases, few attempts have been made to understand its causes and effects, which may justify government intervention or identify policy targets. This paper applies the Granger Causality test to establish causal relationship between the land price increase and several macroeconomic variables. Our tests show that increases in Ml and M2, private construction activities, and stock price index accelerate the land price increase. On the other hand, the increase in land price raises the rate of increase in CPl. WPI and private construction activity; lowers real GNP and GOP rate; and results in higher market interest rates. Many of these findings have obvious explanations, but a few still need further theoretical and empirical investigations. We draw three main conclusions from the analysis. First, the increase in land price cannot be an evidence for the success or failure of microeconomic policy, measures such as land taxation and land use regulations, since it is heavily influenced by macroeconomic variables. Second, the land price increase accelerates inflation, but anti-inflationary policies such as tight monetary policies also stabilize land price. Third, the relationship between the construction activities and the land price increase indicates that construction investments will in the long run, help to stabilize the land price. |
| first_indexed | 2024-12-12T00:04:23Z |
| format | Article |
| id | doaj.art-b4af19df068f431aa2012c030e40d854 |
| institution | Directory Open Access Journal |
| issn | 2586-2995 2586-4130 |
| language | English |
| last_indexed | 2024-12-12T00:04:23Z |
| publishDate | 1991-10-01 |
| publisher | Korea Development Institute |
| record_format | Article |
| series | KDI Journal of Economic Policy |
| spelling | doaj.art-b4af19df068f431aa2012c030e40d8542022-12-22T00:45:10ZengKorea Development InstituteKDI Journal of Economic Policy2586-29952586-41301991-10-01133557410.23895/kdijep.1991.13.3.55Causality between Land Price Increase and Macroeconomic Variables (Written in Korean)손, 재영Despite concerns about rapid land price increases, few attempts have been made to understand its causes and effects, which may justify government intervention or identify policy targets. This paper applies the Granger Causality test to establish causal relationship between the land price increase and several macroeconomic variables. Our tests show that increases in Ml and M2, private construction activities, and stock price index accelerate the land price increase. On the other hand, the increase in land price raises the rate of increase in CPl. WPI and private construction activity; lowers real GNP and GOP rate; and results in higher market interest rates. Many of these findings have obvious explanations, but a few still need further theoretical and empirical investigations. We draw three main conclusions from the analysis. First, the increase in land price cannot be an evidence for the success or failure of microeconomic policy, measures such as land taxation and land use regulations, since it is heavily influenced by macroeconomic variables. Second, the land price increase accelerates inflation, but anti-inflationary policies such as tight monetary policies also stabilize land price. Third, the relationship between the construction activities and the land price increase indicates that construction investments will in the long run, help to stabilize the land price.https://doi.org/10.23895/kdijep.1991.13.3.55 |
| spellingShingle | 손, 재영 Causality between Land Price Increase and Macroeconomic Variables (Written in Korean) KDI Journal of Economic Policy |
| title | Causality between Land Price Increase and Macroeconomic Variables (Written in Korean) |
| title_full | Causality between Land Price Increase and Macroeconomic Variables (Written in Korean) |
| title_fullStr | Causality between Land Price Increase and Macroeconomic Variables (Written in Korean) |
| title_full_unstemmed | Causality between Land Price Increase and Macroeconomic Variables (Written in Korean) |
| title_short | Causality between Land Price Increase and Macroeconomic Variables (Written in Korean) |
| title_sort | causality between land price increase and macroeconomic variables written in korean |
| url | https://doi.org/10.23895/kdijep.1991.13.3.55 |
| work_keys_str_mv | AT sonjaeyeong causalitybetweenlandpriceincreaseandmacroeconomicvariableswritteninkorean |