The housing price boom of the late ’90s: did inflation targeting matter?
AbstractThe recent boom in 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 correct for a possible bias due to self-selection into inflation targeting. We consider 17 industrial economies over 1980-2006, among which nine countries have targeted inflation a some dates. We find robust evidence of a significant positive effect of inflation targeting on real housing price growth and on the housing price to rent ratio.
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Bibliographic InfoPaper provided by Banque de France in its series Working papers with number 255.
Length: 39 pages
Date of creation: 2009
Date of revision:
Inflation targeting; Housing prices; Treatment effect; OECD countries.;
Find related papers by JEL classification:
- E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-11-07 (All new papers)
- NEP-CBA-2009-11-07 (Central Banking)
- NEP-MAC-2009-11-07 (Macroeconomics)
- NEP-MON-2009-11-07 (Monetary Economics)
- NEP-URE-2009-11-07 (Urban & Real Estate Economics)
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