) are polynomials in the lag operator. We will make five modifications to Equation (5) to seize the potential of deviations from The easy consumer cost model and to include the consequences of regulation and financial composition. 1st, in principle, shifts in the demand for housing services must be mirrored in rent: a constructive shift in demand, by way of example, would raise rents, and through the person Value partnership, housing charges need to recognize.
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and σ. An essential implication would be that the decreased the consumer Value, the upper the sensitivity with the housing rate into a presented modify from the fascination charge. Starting from 7 per cent, for example, a 10 basis stage reduction while in the person Charge would lead to an appreciation of around 1.
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