Interest Rate Elasticity of Residential Housing Prices
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Summary:
We examine the interest rate elasticity of housing prices, advancingthe empirical literature in two directions. First, we take a commonly used cross-country panel dataset and evaluate the housing price equation using a consistent estimator in the presence of endogenous explanatory variables and a lagged dependent variable. Second, we carry-out a novel analysis of determinants of residential housing prices in a cross-section of countries. Our results show that the short-term interest rate, and hence monetary policy, has a sizable impact on residential housing prices.
Series:
Working Paper No. 2008/247
Subject:
Housing Housing prices Mortgages Real estate prices Short term interest rates
English
Publication Date:
October 1, 2008
ISBN/ISSN:
9781451871050/1018-5941
Stock No:
WPIEA2008247
Pages:
32
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