The Department of Finance is hosting a Lunch Seminar series featuring notable and emerging researchers from across the globe, taking place in Luxembourg.

Summary:

The seminar will explore whether the housing market influences the financial cycle and the underlying reasons for this. It will present a newly compiled database that tracks a century of monthly building permit data across all U.S. states and the 60 largest metropolitan statistical areas (MSAs). The findings indicate that fluctuations in residential building permit growth are significant predictors of both stock and corporate bond market volatility, remaining relevant even when accounting for various factors such as corporate debt and local risks like natural disasters. Locations with more responsive housing supply typically forecast financial market declines one year ahead, leading to innovative strategies to mitigate the risks associated with overbuilding. A framework based on rational expectations, where local building permits act as a quasi-public signal for future dividends, helps to clarify these observed patterns.

About Prof. LaPoint: ​
Bio, CV & Research

Participants will have the opportunity to enjoy cold lunches, available exclusively for those who register.