Housing sector and the european adjustment process

This paper try to move the discussion on housing/real estate sector effects on economies, and their adjustment, upwards from the national to the international level. The recent discussion on the single currency implementation in the process of creating the EMU has de-emphasized, or often ignored, the role of production factors, consumption, facilities or assets which are characterized by a fixed spatial location. But spatially fixed factor markets play a key role in how European economies adjust after their integration in EMU and in the process of changing their status of "nations" to "regions", as well. Housing arrangements in Europe are likely to hinder effective labour market adjustments among European countries. Ignoring the facts related to the effective labour mobility in theoretical discussion is a little short-sighted.

Keywords: housing, fixed factor, integration, European Union, single currency