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Housing and the Macroeconomy: Inflation and the Financial Accelerator
Author(s) -
MUELLBAUER JOHN
Publication year - 2015
Publication title -
journal of money, credit and banking
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.763
H-Index - 108
eISSN - 1538-4616
pISSN - 0022-2879
DOI - 10.1111/jmcb.12190
Subject(s) - inflation (cosmology) , economics , investment (military) , monetary economics , consumption (sociology) , financial accelerator , finance , financial market , monetary policy , social science , physics , dynamic stochastic general equilibrium , sociology , politics , theoretical physics , political science , law
Three themes connecting housing and the macroeconomy are discussed. First, evidence is presented for the property market as one of the drivers of U.S. consumer price inflation. Second, key drivers of house prices are explained to account for the remarkable diversity of international experience. Finally, three potential links between housing, credit, and the financial accelerator are discussed. These are the consumption channel, the investment channel, and feedback between bad loans and risk‐spreads via the financial system—and how institutional differences between countries can explain the presence, absence and magnitudes of these linkages.