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

Miguel Sarmiento, John Sebastian Tobar-Cruz, Andrés Esteban Casas-Fajardo, Eduardo Yanquen-Briñez
Jaime Alfredo Bonet-Moron, Jaime Andrés Collazos-Rodríguez, Karen Astrid Rubio-Ramírez, Adolfo Ramírez-Moreno, Andrés Felipe Parra-Solano
Julián Alonso Cárdenas-Cárdenas, Deicy Johana Cristiano-Botia, Eliana Rocío González-Molano, Carlos Alfonso Huertas-Campos

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.