Home   >   CSC-OpenAccess Library   >    Manuscript Information
The Influence of Macro factors On Residential Mortgage In Italy
Umberto Filotto, Claudio Giannotti, Gianluca Mattarocci, Xenia Scimone
Pages - 103 - 115     |    Revised - 08-01-2021     |    Published - 01-06-2021
Volume - 12   Issue - 3    |    Publication Date - June 2021  Table of Contents
Italy, Residential Mortgage, Economic Factors, Informal Sector.
This paper examines the role of macro-economic variables, including informal sector, on the growth of the mortgage market in Italy, from 1999 to 2019. We start testing normality, correlation (Pearson) and multicollinearity, then we apply theoretical benchmark model following the approach proposed by Wichura (2006) using a linear regression model. Based on the main findings of this study we show that there a positive and potentially high correlation between residential mortgage and informal sector. In particular, we find that a unit increase in Percentage informal sector employment will cause an increase in residential mortgage. May be counterintuitive as the informal sector magnitude should represent a weaker access to credit for borrowers; nevertheless it may also be the case that informal sector increase anticipate GDP growth signalling a subsequent positive economic downturn. Thus, financial institutions will increase residential mortgage due to the informal sector growth signalling a positive economic trend. This work may help them suggesting how to include informal sector dynamics into residential mortgage pricing, as well as policymakers to read residential mortgage market dynamics and derive informal sector insights.
1 EconPapers 
2 refSeek 
3 BibSonomy 
5 Doc Player 
6 J-Gate 
7 Scribd 
8 Index Copernicus International (ICI) 
9 SlideShare 
10 Google Scholar 
Alam K., Mahal A., (2014), “Economic impact of health shock on households in low and middle income countries: a review of the literature”, Globalization and Health, 10(21), https://doi.org/10.1186/1744-8603-10-21.
Apergis N., Rezitis A.N., (2003), “Housing prices and macroeconomic factors in Greece: Prospects within the EMU”, in Appliend Economic Letters, 10(12), DOI:10.1080/1350485032000100260.
Bartiloro L., Rampazzi C., (2013), “Italian households: saving and wealth during the crisis”, Bank of Italy, February, n. 148.
Bernanke B., Gertler M., Gilchrist S., (1994), “The Financial Accelerator and the Flight to Quality.” The Review of Economics and Statistics, 78(1), 1-15.
Bhat R., Jain N., (2006), “Analysis of Public and Private Healthcare Expenditures”, Economic and Political Weekly, 41(1), 57-68.
Boamah N.A., (2009), “Secondary Mortgage Market (SMM): Is it Right for Financing Housing in Ghana?”.Journal of Science and Technology, 29(1).
Campbell J.Y., Cocco J.F., (2003), “Household risk management and optimal mortgage choice”, Quarterly Journal of Economics, 118(4), 1449- 1494.
Chiquier, L., Hassler, O and Lea, M., (2004), “Mortgage Securities in Emerging Markets”, The World Bank.
Coulson N.E., Fisher L.M., (2009), “Housing tenure and labour market impacts”, Journal of Urban Economics, 65(3), 252–264.
Cristofaro M., Giardino P.L., Leoni L., (2021), “Back to theFuture: A Review and Editorial Agenda of the International Journal of Business Research and Management”, International Journal of Business Research and Management, 12(1).
Dajcman, S., (2020), “Demand for residential mortgage loans and house prices in the euro area”, Economics and Sociology, 13(1), 40-51.
Davis M.A., Heathcote J., (2005), “Housing and the Business Cycle”, International Economic Review, 46(3), 751-784.
De Bandt O., Knetsch T., Penalosa J., Zollino F., (2010), “Housing market in Europe”, in De Bandt O., Knetsch T., Penalosa J., Zollino F, (eds), “Housing market in Europe”, Springer.
De Socio A., (2010), “The Economic and Financial Situation of Italian Non Financial Cororations: An International Comparison, Bank of Italy, Paper n. 66, April.
De Soto H., (2000), “The Five Mysteries of Capital”, in The Five Mysteries of Capital, A Member of the Perseus Books Group.
Demir, H., Kurt, V. and Çagdas, V., (2003) “Housing Finance in Turkey”, FIG Regional Conference, Marrakesh.
Engelhardt G.V., (1996), “Consumption, down payments and liquidity constraints”, Journal of Money, Credit and Banking, 28(2), 255-271.
Felici R., Manzoli E., Pico R., (2012), “La crisi e le famiglie italiane: un’analisi microeconomica dei contratti di mutuo”, Bank of Italy, Quaderni di Economia e Finanza n. 125.
Flatau P., Forbes, M., Hendershott, P.H., Wood, G., (2003), “Homeownership and unemployment: the roles of leverage and public housing”, NBER Working Paper n. 10021.
Follain J.R., (1982), “Does Inflation Affect Real Behaviour: The Case of Housing”, Southern Economic Association, 48(3), 570-582.
Frederic M.S., (2007), “Housing and the monetary transmission mechanism”, Finance and Economics Discussion Series Divisions of Research and Statistics and Monetary Affairs Federal Reserve Board, Washington.
Friedman M., (1967), “The monetary theory and policy of Henry Simons”, The Journal of Law and Economics, 10(10), 1-13.
Gelfand J.E., (1970), “Mortgage Credit and Lower-Middle Income Housing Demand”, Land Economics, 46(2), 163-170.
Gobbi G., Zollino F., (2013), “Tendenze recenti del mercato immobiliare e del credito”, in Il mercato immobiliare in Italia: Gli andamenti ciclici, Bank of Italy, Paper n. 15, July.
Goodhart C., Hofmann B., (2008), “House Prices, Money, Credit, and the Macroeconomy.” Oxford Review of Economic Policy, 24(1), 180-205.
Green R.K., Hendershott P.H., (2001), “Homeownership and unemployment in the US”, Urban Studies, 38(8), 1501–1520.
Gumber A., (2000), “Health Care Burden on Households in the Informal Sector: Implications for Social Security Assistence”, The Indian Journal of Labour Economics.
Gumber A., (2002), “Health insurance for the informal sector: Problems and prospects”, Indian Council for research on International Economic Relations, November.
Hardt J., (2000), “European mortgage markets: structure, funding and future development”, European Mortgage Federation, OECD, June.
Hubbard R.G., Mayer C. J., (2009), “The Mortgage Market Meltdown and House Prices”, Journal of Economic Analysis & Policy, 9(2), 1635-1682.
Iacoviello M., Neri S., (2010), “Housing Market Spillovers: Evidence from an Estimated DSGE Model”, American Economic Journal: Macroeconomics, 2(2), 125-164.
Igan D., Kabundi A., De Simone F.N., (2011), “Housing, credit, and real activity cycles: Characteristics and comovement”, Journal of Housing Economics, 20(3), 210-231.
International Monetary Fund, (2008), “Housing and the Business Cycle”, World Economic Outlook, April.
Issing O., (2005), “Addressing global imbalances: The role of macroeconomic policy”, European Central Bank, October.
Japelli T., Pagano M., (1994), “Saving, growth and liquidity constraints”, The Quarterly Journal of Economics, 109(1), 83-109.
Jha, C.K., (2019), “Financial reforms and corruption: Evidence using GMM estimation”, International Review of Economics and Finance, 62, 66–78.
Kantor Y., Mohlmann J., Nijkamp P., Rouwendal J., (2015), “Homeownership, mortgages, and unemployment”, Letters in Spatial and Resource Science, 8(3), 253-265.
Khairunnisa A.S., Siti Nurazira M.D., Nuradli R.S.M.D., (2020), “Determinants of household debt in emerging economies: A macro panel analysis”, Cogent Business and Management, 7(1).
Kibuthu N.G., (2005), “The extent to which borrowing respond to interest fluctuations”, published MBA project, Kenyatta University.
Kiyotaki N., Moore J., (1997), “Credit Cycles”, Journal of Political Economy, 105(2), 211-248.
Kusairi, S., Muhamad, S., Musdholifah, M., Chang, S. C., (2019), “Labor market and household debt in Asia Pacific countries: Dynamic heterogeneous panel data analysis”, Journal of International Commerce, Economics and Policy, 10(2).
Layard R., Nickell S.J., Jackman R., (1991), “Unemployment: Macroeconomic performance and the labor market”, Oxford University Press: Oxford.
Magri S., Pico R., (2012), “L’indebitamento delle famiglie italiane dopo la crisi del 2008”, Bank of Italy, Quaderni di Economia e Finanza n. 134.
Martin R., Mathema A., (2008), “Housing Finance for the Poor in Morocco: Programs, Policies and Institutions”, Washington, DC: U.S. Agency for International Development.
Mogaka A.J., Mboya K.J., Kamau R. G., (2015), “The Influence of Macro Economic Factors on Mortgage Market Growth in Kenya”, Journal of Finance and Accounting, 3(4), 77-85.
Nobili A., Zollino F., (2012), “A structural models for the housing and credit markets in Italy”, Bank of Italy, Temi di Discussione n. 877.
Nobili, A., and Zollino G. (2017). A structural model for the housing and credit market in Italy”, Journal of Housing Economics, 36(6), 73–87.
Oswald A., (1997), “Thoughts on NAIRU”, Journal of Economic Perspectives, 11(4), 227– 228.
Oswald A.J., (1996), “A conjecture on the explanation for high unemployment in the industrialized nations: part I.”, Working Paper 475, Department of Economics, University of Warwick, Coventry.
Oswald A.J., (1999), “The housing market and Europe’s unemployment: a non-technical paper”, in Van Ewijk C., Van Leuvenstijn, M. (eds.), Homeownership and the Labour Market in Europe. Oxford University Press, Oxford.
Saleh I., (1999), “Housing Market Dynamics in the Metropolitan Area: A Case Study of the Informal Housing Markets in the Metropolitan Jabotabek, Indonesia”, University of Pennsylvania, Electronic Dissertations. http://repository.upenn.edu/dissertationsaccessed on 17th July 2014.
Shafir E., Diamond P., Tversky A., (1997), “Money Illusion”, The Quarterly Journal of Economics, 112(2), 341-374.
Shapiro S.S., Wilk M.B., (1965). "An analysis of variance test for normality (complete samples)", Biometrika, 52(3-4), 591-611.
Stevens, G. (1997), "Some Observations on Low Inflation and Household Finances”, Reserve Bank of Australia Bulletin, October, 38–47.
Taylor J., Jureidini R., (1994), “The Implicit Male Norm in Australian Housing Finance”, Journal of Economic Issue, 28(2), 543-554.
The World Bank, (2012), “Financial Sector Assessment Program Development Module”, Mongolia Housing Finance Technical Note, June.
Tsatsaronis K., Zhu H., (2004), “What Drives Housing Price Dynamics: Cross-Country Evidence”, BIS Quarterly Review, March 2004.
Wichura M.J., (2006), “The coordinate-free approach to linear models”, Cambridge Series in Statistical and Probabilistic Mathematics, Cambridge University Press.
Mr. Umberto Filotto
Department Management and Law, Faculty of Economics, University of Tor Vergata, Rome, 00133 - Italy
Mr. Claudio Giannotti
Department Management and Law, Faculty of Economics, University LUMSA, Rome, 00192 - Italy
Mr. Gianluca Mattarocci
Department Management and Law, Faculty of Economics, University of Tor Vergata, Rome, 00133 - Italy
Mrs. Xenia Scimone
Department Management and Law, Faculty of Economics, University of Tor Vergata, Rome, 00133 - Italy