IS HOUSING ACTIVITY A LEADING INDICATOR

We investigate whether housing activity is a lending indicator of gene ral activity using two dynamic systems. In the national account system , the results indicate that dwelling investment contains leading infor mation for gross national expenditure. In a five-variable system inclu ding a measure of economic activity, housing activity, money, prices a nd a short-term interest rate, housing activity is found to provide an important linkage between economic activity and the rest of the syste m. These results consistently affirm that housing activity is a lendin g indicator of general economic activity.