The Propagation of Regional Shocks in Housing Markets: Evidence from Oil Price Shocks in Canada

The response of Canadian housing markets to oil price shocks provides strong evidence that the demand for originate in one region also raise house prices other regions. We develop a theoretical model helps understand this finding. differentiates between oil-producing and nonoil-producing regions incorporates multiple sectors, trade provinces, government redistribution, consumer spending on fuel. empirically confirm prediction are transmitted by redistribution revenue increased interprovincial trade.