Gupta, RanganSun, Xiaojin2019-09-162020-05Gupta, R. & Sun, X. Housing market spillovers in South Africa: evidence from an estimated small open economy DSGE model. Empirical Economics 58, 2309–2332 (2020). https://doi.org/10.1007/s00181-018-1613-6.0377-7332 (print)1435-8921 (online)10.1007/s00181-018-1613-6http://hdl.handle.net/2263/71355This paper evaluates the impact of housing market spillovers on a small open economy, namely South Africa, using a small open economy new Keynesian dynamic stochastic general equilibrium model which explicitly incorporates a housing sector. Using quarterly data covering the period of 1971:Q1–2015:Q3, we obtain the following set of results: (a) over the business cycle, the housing preference shock and the technology shock in the consumption sector drive most of the fluctuations of real house price; (b) the spillover effects of the housing market to the boarder economy are not negligible; (c) the central bank of South Africa has actively responded to house price movements over the past 45 years; and (d) the flexible exchange rate policy has helped South Africa maintain the macroeconomic stability to a large extent.en© Springer-Verlag GmbH Germany, part of Springer Nature 2018. The original publication is available at http://link.springer.comjournal/181.Housing marketSpilloversMonetary policyDynamic stochastic general equilibrium (DSGE) modelSouth Africa (SA)Postprint Article