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Heterogeneous Monetary Policy Transmission in the Housing Market

Author

Listed:
  • Maria Christidou

    (University of Macedonia)

  • Panagiotis Th. Konstantinou

    (Athens University of Economics and Business and Hellenic Open Univers)

  • Costas Roumanias

    (Athens University of Economics and Business)

Abstract

"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 house prices and residential investment at the national level, the increase being much larger for some states but smaller for others. For states with higher percentage of older people, population density, income inequality the responses are above those of the national aggregates; for states with higher poverty rates and more educated people the responses are below those of the national aggregates. Higher property tax rates are also associated with lower responses of housing investment and house prices."

Suggested Citation

  • Maria Christidou & Panagiotis Th. Konstantinou & Costas Roumanias, 2018. "Heterogeneous Monetary Policy Transmission in the Housing Market," Review of Economic Analysis, Digital Initiatives at the University of Waterloo Library, vol. 10(1), pages 75-96, January.
    • Handle: RePEc:ren:journl:v:10:y:2018:i:1:p:75-96
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    Citations

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    Cited by:

    1. Wilhelmsson, Mats, 2020. "What role does the housing market play for the transmission mechanism?," Working Paper Series 20/5, Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance.
    2. Mats Wilhelmsson, 2020. "What Role Does the Housing Market Play for the Macroeconomic Transmission Mechanism?," JRFM, MDPI, vol. 13(6), pages 1-17, June.

    More about this item

    Keywords

    House prices; Housing Investment; Monetary policy transmission; Heterogeneity;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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