The maple bubble : a history of migration among canadian provinces

Borradores de Economia
Number: 
992
Published: 
Classification JEL: 
G01, G12, C22
Keywords: 
Human capital agglomeration, Social returns, Private returns, Externalities, Uncertainty, Fiscal policy

The most recent

Luis E. Arango, Luis E. Arango, Luz Adriana Flórez, Carlos Esteban Posada
Oscar Iván Ávila-Montealegre, Anderson Grajales, Juan José Ospina-Tejeiro, Mario Andrés Ramos-Veloza
Olga Lucia Acosta Navarro, Andrés Felipe Chitán-Caes, Ana María Iregui-Bohórquez, Ligia Alba Melo-Becerra, María Teresa Ramírez-Giraldo, Jorge Leonardo Rodríguez Arenas

This study reports evidence of the existence of house price bubbles in several Canadian provinces around the recent global financial crisis. Using a wealth of monthly data for about a thirty-year period we find evidence supporting the hypothesis that the bubble in Quebec transmitted to four other Canadian provinces. Using a recently developed migration test, we show evidence of time-varying transmission intensities. In all cases an inverted U-shape is encountered, suggesting that initially migrations gain strength and then decrease after a maximum point is reached. Interestingly, intensities increase significantly around the maximum point of the bubble in Quebec. Our results have important implications for the design of housing market policies.