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This paper investigates how housing prices respond to economic, financial and demographic conditions in emerging markets in Europe. We use quarterly data covering 10 countries over the period 1998–2022 and implement a panel quantile regression approach to obtain a granular analysis of real estate markets. Overall, economic, financial and demographic factors explain the changes in real house prices in emerging Europe, with income growth having the most significant impact. Quantile regression estimations show that income growth matters more for higher housing prices than those at the lower quantiles of the property market. We also find that an increase in short-term or long-term interest rates have a price-dampening impact, indicating that a higher cost of borrowing is associated with lower real house prices. These results indicate that the downturn in house prices could deepen with the looming economic recession and soaring interest rates.

Macroeconomics --- Economics: General --- Real Estate --- Banks and Banking --- Inflation --- Macroeconomics: Consumption, Saving, Production, Employment, and Investment: General (includes Measurement and Data) --- Prices, Business Fluctuations, and Cycles: Other --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Personal Income and Other Nonbusiness Taxes and Subsidies --- Urban, Rural, and Regional Economics: Housing Demand --- Housing Supply and Markets --- Interest Rates: Determination, Term Structure, and Effects --- Aggregate Factor Income Distribution --- Price Level --- Deflation --- Economic & financial crises & disasters --- Economics of specific sectors --- Property & real estate --- Finance --- Housing prices --- Prices --- Long term interest rates --- Financial services --- Short term interest rates --- Income --- National accounts --- Currency crises --- Informal sector --- Economics --- Housing --- Interest rates --- China, People's Republic of

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This paper investigates house price dynamics at high frequency using city-level observations during the period 1994-2022 in Lithuania. We employ multiple time series-based econometric procedures to examine whether real house prices and house price-to-rent ratios exhibit explosive behavior. According to these recursive right-tailed test results, we reject the null hypothesis of no-bubble and find evidence for long and multiple periods of explosive behavior in the real estate market in all major cities during the sample period. While the size of bubbles varies across cities, especially when we use the house price-to-rent ratio, there is clearly a similar boom-bust pattern. Large house price corrections can in turn have adverse effects on economic performance and financial stability, as experienced during the global financial crisis and other episodes in history.

Lithuania, Republic of --- Macroeconomics --- Economics: General --- Real Estate --- Financial Risk Management --- Infrastructure --- Hypothesis Testing --- Time-Series Models --- Dynamic Quantile Regressions --- Dynamic Treatment Effect Models --- Diffusion Processes --- Multiple or Simultaneous Equation Models: Models with Panel Data --- Forecasting and Other Model Applications --- Price Level --- Inflation --- Deflation --- Fiscal Policy --- Housing Supply and Markets --- Financial Crises --- Real Estate Markets, Spatial Production Analysis, and Firm Location: General --- Economic Development: Urban, Rural, Regional, and Transportation Analysis --- Housing --- Economic & financial crises & disasters --- Economics of specific sectors --- Property & real estate --- Housing prices --- Prices --- Asset bubbles --- Financial crises --- Real estate prices --- Asset prices --- National accounts --- Currency crises --- Informal sector --- Economics --- Saving and investment

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Households across Europe are struggling with a double crisis—the worst inflation shock since the World War II and a sudden correction in house prices. There is a rich literature on how housing price cycles affect consumer spending, finding mixed results with a wide range of consumption responses to changes in housing wealth. In this paper, using quarterly data on 20 countries in Europe over the period 1980–2023, we analyze the dynamic relationship between inflation-adjusted housing wealth and consumer spending and obtain statistically significant and economically intuitive results. Household consumption responds positively and swiftly to changes in real house prices and gross disposable income as expected. Using the estimated coefficients, we can deduce that the average quarter-on-quarter decline of -1.96 percent in real house prices in the first quarter of 2023 in Europe could dampen consumer spending by about -0.51 percentage points in real terms on a cumulative basis over a horizon of eight quarters.

Aggregate Factor Income Distribution --- Consumer Economics: Empirical Analysis --- Consumption --- Currency crises --- Disposable income --- Economic & financial crises & disasters --- Economic Development: Urban, Rural, Regional, and Transportation Analysis --- Economics of specific sectors --- Economics --- Economics: General --- Housing prices --- Housing Supply and Markets --- Housing --- Income --- Informal sector --- Infrastructure --- Macroeconomics --- Macroeconomics: Consumption --- Multiple or Simultaneous Equation Models: Models with Panel Data --- National accounts --- National income --- Personal Finance --- Personal Income, Wealth, and Their Distributions --- Prices --- Private consumption --- Property & real estate --- Real Estate --- Saving and investment --- Saving --- Wealth

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This paper identifies and quantifies the drivers of inflation dynamics in the three Baltic economies and assesses the effectiveness of fiscal policy in fighting inflation. It also analyzes the macroeconomic impact of inflation on competitiveness by focusing on the relationship between wages and productivity in the tradeable sector. The results reveal that inflation in the Baltics is largely driven by global factors, but domestic demand matters as well, suggesting that fiscal policy can play a role in containing inflation. Also, there is robust evidence of a long-run (cointegration) relationship between (real) wages in the tradeable (manufacturing) sector and productivity in the Baltics with short-term deviations self-correcting in Estonia and Lithuania only.

Aggregate Human Capital --- Aggregate Labor Productivity --- Comparative or Joint Analysis of Fiscal and Monetary Policy --- Currency crises --- Deflation --- Demand and Supply of Labor: General --- Economic & financial crises & disasters --- Economics of specific sectors --- Economics --- Economics: General --- Employment --- Fiscal Policy --- Fiscal policy --- Fiscal stance --- Income economics --- Industrial productivity --- Inflation --- Informal sector --- Intergenerational Income Distribution --- Labor market --- Labor markets --- Labor --- Labour --- Macroeconomics --- Macroeconomics: Production --- Price Level --- Prices --- Production and Operations Management --- Production --- Productivity --- Stabilization --- Treasury Policy --- Unemployment --- Wages --- Wages, Compensation, and Labor Costs: General