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We study the effect of house price developments on home-equity extraction and household expenditure, exploiting data covering the population of Danish homeowners between 2009 and 2016. Our findings indicate that house price increases affect home-equity extraction - and more so for homeowners...
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impact U.S. household spending. The results suggest that house values affect consumption by serving as collateral for … households to borrow against to smooth their spending. The results show that the consumption of households who need to borrow …, however, have little effect on the expenditures of households who do not need to borrow to finance their consumption. Based on …
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We analytically characterize optimal monetary policy for an augmented New Keynesian model with a housing sector. With rational private sector expectations about housing prices and inflation, optimal monetary policy can be characterized by a standard 'target criterion' that refers to inflation...
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