Asymmetries in housing and financial market institutions and EMU

Maclennan, Duncan

doi:10.1093/oxrep/14.3.54

Cited by 180 publications

(153 citation statements)

References 40 publications

Supporting

Mentioning

146

Contrasting

Unclassified

Order By: Relevance

“…The response of monetary policy to this shock changes the interest payment on the debt. The interac-1 Data on stocks of mortgage debt and proportion of …xed rates from Maclennan et al (1999); data on total UK household debt from Brierley et al (2002); data on the duration of debt from the Council of Mortage Lenders (2004). Debt renegotiation costs are described in detail for the UK in Miles (2004) tion of these e¤ects, and the response of …nancial institutions and consumers, determines the behaviour of the economy following the shock.…”

Section: Introductionmentioning

confidence: 99%

Nominal Debt Dynamics, Credit Constraints and Monetary Policy

Graham¹,

Wright²

2007

The B.E. Journal of Macroeconomics

View full text Add to dashboard Cite

We construct a dynamic general equilibrium model in which household debt is sticky in nominal terms and debtor households are credit constrained. Interest payments on debt contracts may be at floating rates or fixed for the duration of the contract. A key result is that a simple static Taylor Rule can result in a prolonged period in which real interest rates are cut rather than raised in response to an inflationary shock. We show how the proportion of fixed rate contracts affects the monetary transmission mechanism and its implications for the distributional effects of an inflationary shock.

show abstract

Section: Introductionmentioning

confidence: 99%

Nominal Debt Dynamics, Credit Constraints and Monetary Policy

Graham¹,

Wright²

2007

The B.E. Journal of Macroeconomics

View full text Add to dashboard Cite

show abstract

“…Recent studies have found important heterogeneity in the transmission of monetary policy on house prices depending on the structural and institutional features of the mortgage market (Maclennan et al 1998, Calza et al 2007, Muellbauer and Murphy 2008. However, one problem with accounting for institutional differences is the nature of the available data.…”

Section: Resultsmentioning

confidence: 99%

Heterogeneity in money holdings across euro area countries: The role of housing

Setzer

Noord

Wolff

2011

European Journal of Political Economy

View full text Add to dashboard Cite

In this paper we examine why monetary aggregates of euro area Member States have developed differently since the inception of the euro. We derive a money demand equation that incorporates housing wealth and collateral as well as substitution effects on real money holdings. Empirically, we show that cross-country differences in real balances are determined not only by income differences, a standard determinant of money demand, but also by house price developments. Higher house prices and higher user costs of housing are both associated with larger money holdings. Country-specific money holdings are also connected with structural features of the housing market.JEL Classification: E41, E51, E52

show abstract

“…Psychological and sociological factors can amplify the response of the housing market to a shock. The functioning of the finance system can also influence how the housing market responds to a shock (e.g., Muellbauer, 1992;Maclennan et al, 1998;Kasparova & White, 2001). Housing wealth and loan growth can move in tandem, masking the increasing exposure of households to a housing market correction.…”

Section: Housing Market Corrections and Financial Crisesmentioning

confidence: 99%

Housing, Finance, Policy and the Wider Economy

Winkler¹

2017

JMS

View full text Add to dashboard Cite

Building an understanding of the complex dynamics between housing, finance, policy and the wider economy is a critical step towards the development of a strategy that permits policy makers to leverage resources and enable the housing market to function better in the pursuit of economic, financial and social objectives. Powerful real, legislative and financial circuits suggest that an enabling strategy for housing can support societal progress and wellbeing. By summarizing the key findings in the existing theoretical and empirical literature, this study helps to explain the complex interrelations between housing, finance, policy and the wider economy by using a simple model; it also deals with housing-related policies and their effects, examines the rational for housing market regulation, investigates whether housing market corrections threaten financial and macroeconomic stability, and asks whether policies are efficacious at controlling housing market outcomes. The important takeaways from this study are: (i) policy setting should be evidence-based, which necessitates further efforts to address existing data deficiencies; (ii) finance trends are in flux and policy effects can be asymmetric, which necessitates regular and critical housing market reviews to identify misallocation, dislocation and reform needs; (iii) improvement in the functioning of the housing market requires a coordinating authority that takes steps to reconcile the various housing market stakeholders' mutually incompatible interests and arrange for concerted policy and institutional reforms. The study closes with an outlook on future research.

show abstract

Asymmetries in housing and financial market institutions and EMU

Cited by 180 publications

References 40 publications

Nominal Debt Dynamics, Credit Constraints and Monetary Policy

Nominal Debt Dynamics, Credit Constraints and Monetary Policy

Heterogeneity in money holdings across euro area countries: The role of housing

Housing, Finance, Policy and the Wider Economy

Contact Info

Product

Resources

About