Housing Prices, Bank Lending, and Monetary Policy
AbstractIn order to gain more insight into the relationship between housing prices and mortgage lending, we estimate models for both the Dutch housing and the mortgage market. The empirical analysis presented in this paper offers support for the hypothesis that in the Netherlands housing prices and mortgage lending are interdependent. According to our model, housing prices were influenced by changes in bank lending criteria during the estimation period, even when we control for variables such as disposable household income, mortgage interest rate, demographic developments and the housing stock. Mortgage lending was found to be dependent on housing prices as well as disposable income. Our analysis further suggests that in the short run housing prices can deviate substantially from their long-run equilibrium value.
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Bibliographic InfoPaper provided by EconWPA in its series Macroeconomics with number 0209010.
Length: 23 pages
Date of creation: 22 Sep 2002
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Note: Type of Document - PDF; prepared on PC; to print on HP; pages: 23; figures: included. Paper presented at the "Financial Structure, Bank Behaviour and Monetary Policy in the EMU" Conference, October 5-6, 2000, Groningen.
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housing prices; mortgage market; monetary policy;
Find related papers by JEL classification:
- D45 - Microeconomics - - Market Structure and Pricing - - - Rationing; Licensing
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
- G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
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