Economic Policy Uncertainty and House Prices: Evidence from Geographical Regions of England and Wales

摘要

This article empirically investigates the effect of the economic policy uncertainty on house prices across 10 different geographical regions of England and Wales. The empirical study is conducted by means of the autoregressive distributed lag bounds cointegration test. Results show a stable long-run relationship (cointegration) between house prices and its determinants (including economic policy uncertainty) in nine of the regions. Results also evince long- and short-term negative effect of uncertainty to house prices. These results clearly indicate the importance of economic policy uncertainty in the determination of UK house prices and demand.