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Monetary policy and regional price boom in Sweden

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  • Yang, Zan
  • Wang, Songtao
  • Campbell, Robert
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    Abstract

    This study measures the heterogeneous effects of monetary policy on regional house prices in Sweden 1991-2002. We use a multivariate persistent shock metric to examine the impact of short-term interest rate on the property market. We also segregate the influence of interest rate shocks and influence of local shocks to capture their respective effects on regional price boom. We find significant regional effect of monetary policy on housing markets. Interest rate effects dominate the influence of local price innovations in the core economic regions in Sweden. We further discuss the monetary transmission channels and highlight political implications.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Policy Modeling.

    Volume (Year): 32 (2010)
    Issue (Month): 6 (November)
    Pages: 865-879

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    Handle: RePEc:eee:jpolmo:v:32:y::i:6:p:865-879

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    Web page: http://www.elsevier.com/locate/inca/505735

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    Keywords: Monetary policy Regional price boom Sweden;

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    Cited by:
    1. Zhang, Yanbing & Hua, Xiuping & Zhao, Liang, 2012. "Exploring determinants of housing prices: A case study of Chinese experience in 1999–2010," Economic Modelling, Elsevier, vol. 29(6), pages 2349-2361.
    2. Zhang, Yanbing & Hua, Xiuping & Zhao, Liang, 2011. "Monetary policy and housing prices; a case study of Chinese experience in 1999-2010," BOFIT Discussion Papers 17/2011, Bank of Finland, Institute for Economies in Transition.
    3. Wadud, I.K.M. Mokhtarul & Bashar, Omar H.M.N. & Ahmed, Huson Joher Ali, 2012. "Monetary policy and the housing market in Australia," Journal of Policy Modeling, Elsevier, vol. 34(6), pages 849-863.

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