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How to Deal with Real Estate Booms; Lessons from Country Experiences

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  • Pau Rabanal
  • Christopher W. Crowe
  • Giovanni Dell'Ariccia
  • Deniz O Igan

Abstract

The financial crisis showed, once again, that neglecting real estate booms can have disastrous consequences. In this paper, we spell out the circumstances under which a more active policy agenda on this front would be justified. Then, we offer tentative insights on the pros and cons as well as implementation challenges of various policy tools that can be used to contain the damage to the financial system and the economy from real estate boom-bust episodes.

Suggested Citation

  • Pau Rabanal & Christopher W. Crowe & Giovanni Dell'Ariccia & Deniz O Igan, 2011. "How to Deal with Real Estate Booms; Lessons from Country Experiences," IMF Working Papers 11/91, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:11/91
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    Keywords

    Central banks and their policies; real estate; macroeconomic policy; macroprudential regulation; mortgage; mortgages; mortgage loans; mortgage interest; Prices; Business Fluctuations; and Cycles: General (includes Measurement and Data); Financial Markets and the Macroeconomy; Financial Institutions and Services: Government Policy and Regulation;

    JEL classification:

    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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