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Estimating a stock-flow model for the Swiss housing market


This paper analyzes the development of housing market imbalances, housing prices and residential investment in Switzerland within a stock-flow framework. In the long run, the desired level of residential capital stock and the existing residential capital stock revert. Empirical results indicate, however, that housing demand can diverge from the existing supply for several years due to the slow adjustment of the residential capital stock to shocks. In the short run, the market therefore has to be cleared by price adjustments. And indeed, it can be shown empirically that changes in prices are significantly and strongly dependent on the level of stock imbalances. Furthermore, housing prices prove to be an important determinant of residential investment, which in turn drives the adjustment process of the residential capital stock towards its desired level.


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Correspondence to Elizabeth Steiner.

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The author would like to thank Katrin Assenmacher, Sarah Lein, Angelo Ranaldo, Barbara Rudolf, Jonas Stulz, Caroline Schmidt, Peter Tillman, Attilio Zanetti, Mathias Zurinden and an anonymous referee for their valuable contribution to this paper.

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Open Access This article is distributed under the terms of the Creative Commons Attribution 2.0 International License ( ), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

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Steiner, E. Estimating a stock-flow model for the Swiss housing market. Swiss J Economics Statistics 146, 601–627 (2010).

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