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Monetary Policy and Housing Booms

Author

Listed:
  • John C. Williams

    (Federal Reserve Bank of San Francisco)

Abstract

A multitude of factors contributed to the housing booms and crashes experienced in many countries and the ensuing global financial crisis. Much of the existing research on these issues assumes that agents have complete information about the economic environment and form rational expectations. This commentary argues that models with imperfect knowledge and learning provide a potentially rich avenue of research on issues related to housing bubbles and monetary policy. Such models open up an avenue for the endogenous emergence of bubble-like behavior and also provide channels by which monetary and supervisory policies can influence the development of bubbles.

Suggested Citation

  • John C. Williams, 2011. "Monetary Policy and Housing Booms," International Journal of Central Banking, International Journal of Central Banking, vol. 7(1), pages 345-355, March.
  • Handle: RePEc:ijc:ijcjou:y:2011:q:1:a:15
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    References listed on IDEAS

    as
    1. Oriol Aspachs-Bracons & Pau Rabanal, 2011. "The Effects of Housing Prices and Monetary Policy in a Currency Union," International Journal of Central Banking, International Journal of Central Banking, vol. 7(1), pages 225-274, March.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Guay Lim & Sarantis Tsiaplias, 2016. "Non-Linearities in the Relationship between House Prices and Interest Rates: Implications for Monetary Policy," Melbourne Institute Working Paper Series wp2016n02, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    2. Punzi, Maria Teresa, 2016. "Financial cycles and co-movements between the real economy, finance and asset price dynamics in large-scale crises," FinMaP-Working Papers 61, Collaborative EU Project FinMaP - Financial Distortions and Macroeconomic Performance: Expectations, Constraints and Interaction of Agents.
    3. repec:iae:iaewps:wp2016n2 is not listed on IDEAS
    4. Lambertini, Luisa & Mendicino, Caterina & Teresa Punzi, Maria, 2013. "Leaning against boom–bust cycles in credit and housing prices," Journal of Economic Dynamics and Control, Elsevier, vol. 37(8), pages 1500-1522.
    5. Jordà, Òscar & Schularick, Moritz & Taylor, Alan M., 2015. "Betting the house," Journal of International Economics, Elsevier, vol. 96(S1), pages 2-18.
      • Òscar Jordà & Moritz Schularick & Alan M. Taylor, 2014. "Betting the House," NBER Chapters,in: NBER International Seminar on Macroeconomics 2014, pages 2-18 National Bureau of Economic Research, Inc.
    6. repec:sgh:annals:i:47:y:2017:p:101-112 is not listed on IDEAS
    7. John C. Williams, 2011. "Monetary policy in an era of crises," Speech 93, Federal Reserve Bank of San Francisco.
    8. Eric Mayer & Johannes Gareis, 2013. "What Drives Ireland’s Housing Market? A Bayesian DSGE Approach," Open Economies Review, Springer, vol. 24(5), pages 919-961, November.
    9. Jeroen Hessel & Jolanda Peeters, 2011. "Housing bubbles, the leverage cycle and the role of central banking," DNB Occasional Studies 905, Netherlands Central Bank, Research Department.
    10. Bofinger, Peter & Debes, Sebastian & Gareis, Johannes & Mayer, Eric, 2013. "Monetary policy transmission in a model with animal spirits and house price booms and busts," Journal of Economic Dynamics and Control, Elsevier, vol. 37(12), pages 2862-2881.

    More about this item

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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