The housing price boom of the late ’90s: did inflation targeting matter?
The recent boom in housing markets of most developed economies has spurred criticism that inflation targeting central banks may have neglected the build-up of financial imbalances. This paper provides a formal empirical test of such claims, using a standard program evaluation methodology to correct for a possible bias due to self-selection into inflation targeting. We consider 17 industrial economies over 1980-2006, among which nine countries have targeted inflation a some dates. We find robust evidence of a significant positive effect of inflation targeting on real housing price growth and on the housing price to rent ratio.
|Date of creation:||2009|
|Date of revision:|
|Contact details of provider:|| Postal: Banque de France 31 Rue Croix des Petits Champs LABOLOG - 49-1404 75049 PARIS|
Web page: http://www.banque-france.fr/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Lin, Shu & Ye, Haichun, 2007. "Does inflation targeting really make a difference? Evaluating the treatment effect of inflation targeting in seven industrial countries," Journal of Monetary Economics, Elsevier, vol. 54(8), pages 2521-2533, November.
- Katrin Assenmacher-Wesche & Stefan Gerlach, 2008.
"Ensuring financial stability: financial structure and the impact of monetary policy on asset prices,"
IEW - Working Papers
361, Institute for Empirical Research in Economics - University of Zurich.
- Assenmacher-Wesche, Katrin & Gerlach, Stefan, 2008. "Ensuring Financial Stability: Financial Structure and the Impact of Monetary Policy on Asset Prices," CEPR Discussion Papers 6773, C.E.P.R. Discussion Papers.
- Assenmacher-Wesche, Katrin & Gerlach, Stefan, 2008. "Ensuring financial stability: Financial structure and the impact of monetary policy on asset prices," IMFS Working Paper Series 16, Goethe University Frankfurt, Institute for Monetary and Financial Stability (IMFS).
- Claessens, Stijn & Kose, Ayhan & Terrones, Marco E, 2008.
"What Happens During Recessions, Crunches and Busts?,"
CEPR Discussion Papers
7085, C.E.P.R. Discussion Papers.
- Stijn Claessens & M. Ayhan Kose & Marco E. Terrones, 2009. "What happens during recessions, crunches and busts?," Economic Policy, CEPR;CES;MSH, vol. 24, pages 653-700, October.
- Marco Terrones & Ayhan Kose & Stijn Claessens, 2008. "What Happens During Recessions, Crunches and Busts?," IMF Working Papers 08/274, International Monetary Fund.
- Sianesi, Barbara, 2001. "An evaluation of the active labour market programmes in Sweden," Working Paper Series 2001:5, IFAU - Institute for Evaluation of Labour Market and Education Policy.
- Alessandro Calza & Tommaso Monacelli & Livio Stracca, 2013.
"Housing Finance And Monetary Policy,"
Journal of the European Economic Association,
European Economic Association, vol. 11, pages 101-122, 01.
- DellAriccia, Giovanni & Igan, Deniz & Laeven, Luc, 2008.
"Credit Booms and Lending Standards: Evidence From The Subprime Mortgage Market,"
CEPR Discussion Papers
6683, C.E.P.R. Discussion Papers.
- Giovanni Dell’Ariccia & Deniz Igan & Luc Laeven, 2012. "Credit Booms and Lending Standards: Evidence from the Subprime Mortgage Market," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 44, pages 367-384, 03.
- Giovanni Dell'Ariccia & Luc Laeven & Deniz O Igan, 2008. "Credit Booms and Lending Standards; Evidence From the Subprime Mortgage Market," IMF Working Papers 08/106, International Monetary Fund.
- Dell’Ariccia, G. & Igan, D. & Laeven, L., 2009. "Credit Booms and Lending Standards : Evidence from the Subprime Mortgage Market," Discussion Paper 2009-46 S, Tilburg University, Center for Economic Research.
- Jeffrey M. Wooldridge, 2001.
"Econometric Analysis of Cross Section and Panel Data,"
MIT Press Books,
The MIT Press,
edition 1, volume 1, number 0262232197, March.
- Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, March.
- Marco Vega & Diego Winkelried, 2005.
"Inflation Targeting and Inflation Behavior: A Successful Story?,"
International Journal of Central Banking,
International Journal of Central Banking, vol. 1(3), December.
- Marco Vega & Diego Winkelried, 2005. "Inflation Targeting and Inflation Behavior: A Successful Story?," Macroeconomics 0502026, EconWPA.
- Vega, Marco & Winkelried, Diego, 2004. "Inflation Targeting and Inflation Behavior: A Successful Story?," MPRA Paper 838, University Library of Munich, Germany.
- DETKEN Carsten & SMETS Frank, .
"Asset Price Booms and Monetary Policy,"
- Torsten Persson, 2001. "Currency unions and trade: how large is the treatment effect?," Economic Policy, CEPR;CES;MSH, vol. 16(33), pages 433-462, October.
- Frederic S. Mishkin & Klaus Schmidt-Hebbel, 2001.
"One Decade of Inflation Targeting in the World: What Do We Know and What Do We Need to Know?,"
NBER Working Papers
8397, National Bureau of Economic Research, Inc.
- Frederic S. Mishkin & Klaus Schmidt-Hebbel, 2001. "One decade of inflation targeting in the world : What do we know and what do we need to know?," Working Papers Central Bank of Chile 101, Central Bank of Chile.
- Monika Piazzesi & Martin Schneider, 2007. "Inflation Illusion, Credit, and Asset Pricing," NBER Working Papers 12957, National Bureau of Economic Research, Inc.
- William R. White & Claudio E. V. Borio, 2004.
"Whither monetary and financial stability? the implications of evolving policy regimes,"
BIS Working Papers
147, Bank for International Settlements.
- Claudio Borio & William R. White, 2003. "Whither monetary and financial stability : the implications of evolving policy regimes," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 131-211.
- Fukuda, Shin-ichi & Hoshi, Takeo & Ito, Takatoshi & Rose, Andrew, 2006. "International Finance," Journal of the Japanese and International Economies, Elsevier, vol. 20(4), pages 455-458, December.
- Nathalie Girouard & Mike Kennedy & Paul van den Noord & Christophe AndrÃ©, 2006. "Recent House Price Developments: The Role of Fundamentals," OECD Economics Department Working Papers 475, OECD Publishing.
- Markus Frölich, 2004. "Finite-Sample Properties of Propensity-Score Matching and Weighting Estimators," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 77-90, February.
- Frederic S. Mishkin, 2004. "Can Inflation Targeting Work in Emerging Market Countries?," NBER Working Papers 10646, National Bureau of Economic Research, Inc.
- Jeffery Amato & Hyun Shin, 2006. "Imperfect common knowledge and the information value of prices," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 27(1), pages 213-241, 01.
- Charles Bean, 2003.
"Asset prices, financial imbalances and monetary policy: are inflation targets enough?,"
BIS Working Papers
140, Bank for International Settlements.
- Charles Bean, 2003. "Asset Prices, Financial Imbalances and Monetary Policy: Are Inflation Targets Enough?," RBA Annual Conference Volume, in: Anthony Richards & Tim Robinson (ed.), Asset Prices and Monetary Policy Reserve Bank of Australia.
- Michael D. Bordo & David C. Wheelock, 1998. "Price stability and financial stability: the historical record," Review, Federal Reserve Bank of St. Louis, issue Sep, pages 41-62.
- Stephan V Arthur, 2005. "Obtaining real estate data: criteria, difficulties and limitations," BIS Papers chapters, in: Bank for International Settlements (ed.), Real estate indicators and financial stability, volume 21, pages 63-69 Bank for International Settlements.
- James J. Heckman & Hidehiko Ichimura & Petra Todd, 1998. "Matching As An Econometric Evaluation Estimator," Review of Economic Studies, Oxford University Press, vol. 65(2), pages 261-294.
- William R. White, 2006. "Is price stability enough?," BIS Working Papers 205, Bank for International Settlements.
When requesting a correction, please mention this item's handle: RePEc:bfr:banfra:255. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael brassart)
If references are entirely missing, you can add them using this form.