We perform an analysis to determine how well the introduction of a countercyclical loanto- value (LTV) ratio can reduce household indebtedness and housing price fluctuations compared with a monetary policy rule augmented with house price inflation. To this end, we construct a New Keynesian model...

This paper examines the transmission channels through which property markets propagate shocks to the real economy. Using a four-equation model which portrays the theoretical inter-linkages between real estate value and other components of the economy, our findings suggest that in the short run,...

The main objective is to answer the question: What role does the housing market play for the transmission mechanism and (in particular) is the impact constant over time? The research question also includes analyzing the importance of the housing market for the transmission mechanism. We estimate...

We document that the transmission of monetary policy to real house prices and housing investment is heterogeneous across the US states during the period 1983-2008 and relate this heterogeneity to various state level observable factors. We find that an expansionary monetary policy raises real...

This paper tests for the presence of a credit channel (particularly a bank-lending sub-channel) for monetary policy in the housing market.We argue that the importance of this channel for investment in residential housing is highly dependent on the structural features, and particularly the...