Open AccessHeterogeneous Monetary Policy Transmission in the US Housing Market
Author(s) -
Maria Christidou,
Panagiotis Theodore Konstantinou,
Costas Roumanias
Publication year - 2018
Publication title -
review of economic analysis
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.101
H-Index - 1
ISSN - 1973-3909
DOI - 10.15353/rea.v10i1.1509
Subject(s) - economics , house price , investment (military) , shock (circulatory) , monetary policy , monetary economics , inequality , poverty , economic growth , medicine , mathematical analysis , mathematics , politics , political science , law
We assess the effects of monetary policy on real house prices and housing investment across the US states during the period 1983-2008. We find that an expansionary monetary shock generates higher housing investment and house prices at the national level. At the state level, however the responses of housing investment and house prices differ from the nation-wide responses. We relate this heterogeneity to various observable factors such as property tax rates, howeownership, income inequality, poverty and demographic factors. All these factors are crucial in explaining the heterogeneity of the state-level responses.