报告人及题目：许志伟：Flight to Housing, (with Feng Dong, Jianfeng Liu and Bo Zhao)
Abstract: The 2007 global financial crisis has generated episodes of flight to liquidity and quality with lasting high uncertainty, especially in the age of the shortage of safe assets. This is particularly true for developing economies like China, in which financial market is underdeveloped and the financial account is tightly regulated. Both the household-level survey and housing transaction data suggest that a higher economic uncertainty boosts Chinese house prices, especially those with relatively good quality. Motivated by the empirical facts, we embed housings as safe assets into a dynamic general equilibrium model with incomplete markets. With the calibration on the Chinese economy, we show that household's holding housings to fight against the increasing uncertainty delivers a housing boom, crowding out resources that could have been allocated to the real sector, and resulting in a recession. We further incorporate the major policy intervention in the Chinese housing market, i.e., the house-purchase limit policy, into our baseline model. Policy intervention does effectively curb the house prices and dampen the crowding out effect, but at the cost of restricting households' access to housings as the store of value, and thus lowers welfare by magnifying consumption dispersion. Consequently, the policy intervention faces a trade-off between macro-level stability and micro-level volatility.