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Monetary policy and the housing bubble

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Author Info

  • Jane Dokko
  • Brian Doyle
  • Michael T. Kiley
  • Jinill Kim
  • Shane Sherlund
  • Jae Sim
  • Skander Van den Heuvel

Abstract

We examine the role of monetary policy in the housing bubble. Our review examines the setting of monetary policy in the middle of this decade, the impetus from monetary policy to the housing market, and other factors that may have contributed to the run-up, and subsequent collapse, in house prices.

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File URL: http://www.federalreserve.gov/pubs/feds/2009/200949/200949abs.html
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File URL: http://www.federalreserve.gov/pubs/feds/2009/200949/200949pap.pdf
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Bibliographic Info

Paper provided by Board of Governors of the Federal Reserve System (U.S.) in its series Finance and Economics Discussion Series with number 2009-49.

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Date of creation: 2009
Date of revision:
Handle: RePEc:fip:fedgfe:2009-49

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Related research

Keywords: Housing - Prices ; Monetary policy;

This paper has been announced in the following NEP Reports:

References

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  1. Passmore, Stuart Wayne, 1993. "Econometric Models of the Eleventh District Cost of Funds Index," The Journal of Real Estate Finance and Economics, Springer, vol. 6(2), pages 175-88, March.
  2. Matteo Iacoviello & Raoul Minetti, 2003. "Financial Liberalization And The Sensitivity Of House Prices To Monetary Policy: Theory And Evidence," Manchester School, University of Manchester, vol. 71(1), pages 20-34, January.
  3. Atif Mian & Amir Sufi, 2009. "The Consequences of Mortgage Credit Expansion: Evidence from the U.S. Mortgage Default Crisis," The Quarterly Journal of Economics, MIT Press, vol. 124(4), pages 1449-1496, November.
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  6. Stephen G. Cecchetti & Lianfa Li, 2008. "Do Capital Adequacy Requirements Matter For Monetary Policy?," Economic Inquiry, Western Economic Association International, vol. 46(4), pages 643-659, October.
  7. John B. Taylor, 1999. "Monetary Policy Rules," NBER Books, National Bureau of Economic Research, Inc, number tayl99-1, October.
  8. John B. Taylor, 1998. "An Historical Analysis of Monetary Policy Rules," NBER Working Papers 6768, National Bureau of Economic Research, Inc.
  9. Gete, Pedro, 2009. "Housing Markets and Current Account Dynamics," MPRA Paper 20957, University Library of Munich, Germany, revised 24 Feb 2010.
  10. John V. Duca, 2005. "Making sense of elevated housing prices," Southwest Economy, Federal Reserve Bank of Dallas, issue Sep, pages 1, 7-13.
  11. Stanton, Richard & Wallace, Nancy, 1999. "Anatomy of an ARM: The Interest-Rate Risk of Adjustable-Rate Mortgages," The Journal of Real Estate Finance and Economics, Springer, vol. 19(1), pages 49-67, July.
  12. Andrea Ferrero & Mark Gertler & Lars E.O. Svensson, 2008. "Current Account Dynamics and Monetary Policy," NBER Working Papers 13906, National Bureau of Economic Research, Inc.
  13. Kosuke Aoki & James Proudman & Gertjan Vlieghe, 2002. "House prices, consumption, and monetary policy: a financial accelerator approach," Bank of England working papers 169, Bank of England.
  14. LeRoy, Stephen F, 1996. "Mortgage Valuation under Optimal Prepayment," Review of Financial Studies, Society for Financial Studies, vol. 9(3), pages 817-44.
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  16. Posey, Lisa L. & Yavas, Abdullah, 2001. "Adjustable and Fixed Rate Mortgages as a Screening Mechanism for Default Risk," Journal of Urban Economics, Elsevier, vol. 49(1), pages 54-79, January.
  17. Daniel F. Waggoner & Tao Zha, 1999. "Conditional Forecasts In Dynamic Multivariate Models," The Review of Economics and Statistics, MIT Press, vol. 81(4), pages 639-651, November.
  18. William Goetzmann & Liang Peng & Jacqueline Yen, 2012. "The Subprime Crisis and House Price Appreciation," The Journal of Real Estate Finance and Economics, Springer, vol. 44(1), pages 36-66, January.
  19. Richard H. Clarida & Diane Coyle, 1984. "Conditional Projection by Means of Kalman Filtering," NBER Technical Working Papers 0036, National Bureau of Economic Research, Inc.
  20. John B. Taylor, 1999. "Introduction to "Monetary Policy Rules"," NBER Chapters, in: Monetary Policy Rules, pages 1-14 National Bureau of Economic Research, Inc.
  21. University of Chicago & Pedro Gete, 2009. "Housing Markets and Current Account Dynamics," 2009 Meeting Papers 427, Society for Economic Dynamics.
  22. Joshua Gallin, 2008. "The Long-Run Relationship Between House Prices and Rents," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 36(4), pages 635-658, December.
  23. John V. Duca, 2004. "How vulnerable are housing prices?," Southwest Economy, Federal Reserve Bank of Dallas, issue Mar, pages 1, 11-16.
  24. Keys, Benjamin J. & Mukherjee, Tanmoy & Seru, Amit & Vig, Vikrant, 2009. "Financial regulation and securitization: Evidence from subprime loans," Journal of Monetary Economics, Elsevier, vol. 56(5), pages 700-720, July.
  25. Michael Woodford, 2007. "The Case for Forecast Targeting as a Monetary Policy Strategy," Journal of Economic Perspectives, American Economic Association, vol. 21(4), pages 3-24, Fall.
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