The housing price boom of the late 1990s: Did inflation targeting matter?
AbstractThe recent boom in the housing markets of most developed economies has spurred criticism that inflation targeting central banks may have neglected the build-up of financial imbalances. This paper provides a formal empirical test of such claims, using a standard program evaluation methodology to control for a possible bias due to self-selection into inflation targeting. We consider 17 industrial economies over the period 1980-2007, among which nine countries have targeted inflation at some point. We find robust evidence of a significant positive effect of inflation targeting on real house price growth and on the house price-to-rent ratio.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Financial Stability.
Volume (Year): 6 (2010)
Issue (Month): 4 (December)
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Web page: http://www.elsevier.com/locate/jfstabil
Inflation targeting Housing prices Treatment effect OECD countries;
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