The house price-to-income ratio (PIR) is widely used as an affordability indicator. This paper complements the cross-sectionally focused literature by proposing a tractable model for the PIR dynamics. Our model predicts that the PIR is very persistent and is correlated to the lagged aggregate...

This study investigates whether the unprecedented liquidity injected in the economy by the U.S Fed through unconventional monetary policy measure, popularly known as quantitative easing (QE), is a systematic factor that can explain the abnormally low U.S. housing starts of recent years. We use...

This paper revisits the effectiveness of Chinese monetary policy from augments concerning rational expectations. To estimate the dynamics of expectations, we incorporate market regime switching into the estimation of the rational expectations element using a recursive solution method. When...

This paper examines the heterogeneous effects of unconventional monetary pol icy on housing default and foreclosure across subprime and prime regions. Using both daily and monthly data and various identification schemes, we find that expansionary unconventional monetary policy shocks reduce...

Hong Kong's inflation is heavily influenced by the development in the property market, as property prices can affect the CPI through the CPI rental component, rental cost effect on service fees and charges, and the wealth effect on aggregate demand. Therefore, the deployment of countercyclical...

Monetary and macroprudential policies are interconnected parts of the twin mandate of many central banks. We describe the Czech National Bank's approach to one aspect of integrating these two policies, namely the use of a broader inflation measure that includes house prices and enters monetary...

This paper uses a simple model based on the board game Monopoly to analyze the drivers of house prices and wealth inequality. Simulations show that inequality generally builds up fast even if players have equal starting conditions and house prices are stable; rising house prices imply more...

In this paper we describe the Czech National Bank’s approach to incorporating macroprudential considerations into monetary policy decision making: the use of a broader inflation measure that gives substantial weight to house prices and is considered along with headline CPI inflation. We argue...

This paper considers the link between macroeconomic policy and housing demand in an upper middle-income transition economy, Kazakhstan. The paper further explores price cointegration and contagion across cities. We find evidence that some parts of the housing market lead others but that,...

This study uses theoretical models and empirical research to explain that interest rates affect the structure of housing price formation and correction rather than affect the price alone. In particular, when interest rates are substantially reduced, the correction of housing prices toward...