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Euro area house prices and unconventional monetary policy surprises

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  • Hülsewig, Oliver
  • Rottmann, Horst

Abstract

This paper examines the reaction of house prices in a panel of euro area countries to monetary policy surprises over the period 2010–2019. Using Jordà’s (2005) local projection method, we find that real house prices rise in response to expansionary monetary policy shocks that can be related to unconventional policy measures. In the core countries including Ireland, we also find that lending for house purchases increases relative to nominal output. Thus, household debt rises.

Suggested Citation

  • Hülsewig, Oliver & Rottmann, Horst, 2021. "Euro area house prices and unconventional monetary policy surprises," Economics Letters, Elsevier, vol. 205(C).
    • Handle: RePEc:eee:ecolet:v:205:y:2021:i:c:s0165176521002391
    DOI: 10.1016/j.econlet.2021.109962
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    Cited by:

    1. Oliver Hülsewig & Horst Rottmann, 2022. "Euro Area Periphery Countries' Fiscal Policy and Monetary Policy Surprises," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 84(3), pages 544-568, June.
    2. Ma, Chaoqun & Tian, Yonggang & Hsiao, Shisong & Deng, Liurui, 2022. "Monetary policy shocks and Bitcoin prices," Research in International Business and Finance, Elsevier, vol. 62(C).
    3. Sigal Ribon, 2023. "The Interaction between Macroprudential and Monetary Policies and the Housing Market – A VAR Examination for Israel," Bank of Israel Working Papers 2023.11, Bank of Israel.
    4. Eiblmeier, Sebastian, 2023. "Differential Effects of Unconventional Monetary Policy," Hannover Economic Papers (HEP) dp-707, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    5. Egan, Paul & Bergin, Adele, 2023. "The impact of government spending on Ireland’s housing and residential market – Targeted vs economy-wide stimulus," Journal of Policy Modeling, Elsevier, vol. 45(3), pages 552-569.

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    More about this item

    Keywords

    House prices; Unconventional monetary policy; Local projection method;
    All these keywords.

    JEL classification:

    • 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
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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