The Role of the Housing Market in Monetary Transmission
AbstractAs part of the monetary transmission studies of the Magyar Nemzeti Bank, this paper attempts to analyse the role of the housing market in the monetary transmission mechanism of Hungary. The housing market can influence monetary transmission through three channels, namely, the nature of the interest burden of mortgage loans, asset (house) prices, and the credit channel. The study first summarises the experiences of developed countries, paying special attention to issues arising from the monetary union. It then examines the developments in the Hungarian housing and mortgage markets in the last 15 years, as well as the expected developments and changes attendant to the adoption of the euro. Using panel econometric techniques, the study investigates the link between macroeconomic variables and house prices in Hungary, and the effect of monetary policy on housing investment and consumption through the wealth effect and house equity withdrawal.
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Bibliographic InfoPaper provided by Magyar Nemzeti Bank (the central bank of Hungary) in its series MNB Background Studies (discontinued) with number 2005/3.
Length: 38 pages
Date of creation: 2005
Date of revision:
Housing; Monetary transmission; Mortgage market; Panel econometrics.;
Other versions of this item:
- Gabor Vadas & Gergely Kiss, 2005. "The Role of the Housing Market in Monetary Transmission," Macroeconomics 0512010, EconWPA.
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-08-26 (All new papers)
- NEP-CBA-2006-08-26 (Central Banking)
- NEP-FMK-2006-08-26 (Financial Markets)
- NEP-MAC-2006-08-26 (Macroeconomics)
- NEP-MON-2006-08-26 (Monetary Economics)
- NEP-URE-2006-08-26 (Urban & Real Estate Economics)
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