Journal Article

House prices and the stance of monetary policy

Abstract: This paper estimates a Bayesian vector autoregression for the U.S. economy that includes a housing sector and addresses the following questions: Can developments in the housing sector be explained on the basis of developments in real and nominal gross domestic product and interest rates? What are the effects of housing demand shocks on the economy? How does monetary policy affect the housing market? What are the implications of house price developments for the stance of monetary policy? Regarding the latter question, we implement a Cspedes et al. (2006) version of a monetary conditions index.

Keywords: Housing - Prices; Monetary policy;

Status: Published in Proceedings of the Thirty-Second Annual Economic Policy Conference of the Federal Reserve Bank of St. Louis : Monetary Policy Under Uncertainty

Bibliographic Information

Provider: Federal Reserve Bank of St. Louis

Part of Series: Review

Publication Date: 2008

Volume: 90

Issue: Jul

Pages: 339-366