Housing And The Monetary Transmission Mechanism
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| Author | : Mr.Luis Brandao-Marques |
| Publisher | : International Monetary Fund |
| Total Pages | : 54 |
| Release | : 2020-02-21 |
| Genre | : Business & Economics |
| ISBN | : 1513529730 |
Central banks in emerging and developing economies (EMDEs) have been modernizing their monetary policy frameworks, often moving toward inflation targeting (IT). However, questions regarding the strength of monetary policy transmission from interest rates to inflation and output have often stalled progress. We conduct a novel empirical analysis using Jordà’s (2005) approach for 40 EMDEs to shed a light on monetary transmission in these countries. We find that interest rate hikes reduce output growth and inflation, once we explicitly account for the behavior of the exchange rate. Having a modern monetary policy framework—adopting IT and independent and transparent central banks—matters more for monetary transmission than financial development.
| Author | : Frederic S. Mishkin |
| Publisher | : |
| Total Pages | : 70 |
| Release | : 2007 |
| Genre | : Housing |
| ISBN | : |
The housing market is of central concern to monetary policy makers. To achieve the dual goals of price stability and maximum sustainable employment, monetary policy makers must understand the role that housing plays in the monetary transmission mechanism if they are to set policy instruments appropriately. In this paper, I examine what we know about the role of housing in the monetary transmission mechanism and then explore the implications of this knowledge for the conduct of monetary policy. I begin with a theoretical and empirical review of the main housing-related channels of the transmission mechanism. These channels include the ways interest rates directly influence the user cost of housing capital, expectations of future house-price movements, and housing supply; and indirectly influence the real economy through standard wealth effects from house prices, balance sheet, credit-channel effects on consumer spending, and balance sheet, credit-channel effects on housing demand. I then consider the interaction of financial stability with the monetary transmission mechanism, and discuss the ways in which the housing sector might be a source of financial instability, and whether such instability could affect the ability of a central bank to stabilize the overall macroeconomy. I conclude with a discussion of two key policy issues. First, how can monetary policy makers deal with the uncertainty with regard to housing-related monetary transmission mechanisms? And second, how can monetary policy best respond to fluctuations in asset prices, especially house prices, and to possible asset-price bubbles?
| Author | : Thomas Sowell |
| Publisher | : Basic Books (AZ) |
| Total Pages | : 194 |
| Release | : 2009-05-12 |
| Genre | : Business & Economics |
| ISBN | : 0465018807 |
Explains how we got into the current economic disaster that developed out of the economics and politics of the housing boom and bust. The "creative" financing of home mortgages and "creative" marketing of financial securities based on these mortgages to countries around the world, are part of the story of how a financial house of cards was built up--and then collapsed.
| Author | : Steven Durlauf |
| Publisher | : Springer |
| Total Pages | : 395 |
| Release | : 2016-04-30 |
| Genre | : Performing Arts |
| ISBN | : 0230280854 |
Specially selected from The New Palgrave Dictionary of Economics 2nd edition, each article within this compendium covers the fundamental themes within the discipline and is written by a leading practitioner in the field. A handy reference tool.
| Author | : Great Britain. Treasury |
| Publisher | : |
| Total Pages | : 107 |
| Release | : 2003 |
| Genre | : Consumption (Economics) |
| ISBN | : 9780118490184 |
This publication is part of a set of 18 documents which have been prepared by H.M. Treasury to inform the assessment of the Government's five economic tests for Economic and Monetary Union (EMU) entry into the euro area. In relation to the convergence test, this study looks at evidence on differences in structural aspects of the housing market across the UK and the euro area, and considers the implications for household interest rate sensitivity and consumption. It focuses on four structural aspects: house price trends, mortgage markets, housing tenure, and mortgage equity withdrawl. Whilst it is recognised that past relationships may not be a good guide to what might happen if the UK were to join EMU, the study finds little sign of significant convergence in housing and mortgage markets to date.
| Author | : Viral V. Acharya |
| Publisher | : Princeton University Press |
| Total Pages | : 233 |
| Release | : 2011-03-14 |
| Genre | : Business & Economics |
| ISBN | : 1400838096 |
Why America's public-private mortgage giants threaten the world economy—and what to do about it The financial collapse of Fannie Mae and Freddie Mac in 2008 led to one of the most sweeping government interventions in private financial markets in history. The bailout has already cost American taxpayers close to $150 billion, and substantially more will be needed. The U.S. economy--and by extension, the global financial system--has a lot riding on Fannie and Freddie. They cannot fail, yet that is precisely what these mortgage giants are guaranteed to do. How can we limit the damage to our economy, and avoid making the same mistakes in the future? Guaranteed to Fail explains how poorly designed government guarantees for Fannie Mae and Freddie Mac led to the debacle of mortgage finance in the United States, weighs different reform proposals, and provides sensible, practical recommendations. Despite repeated calls for tougher action, Washington has expanded the scope of its guarantees to Fannie and Freddie, fueling more and more housing and mortgages all across the economy--and putting all of us at risk. This book unravels the dizzyingly immense, highly interconnected businesses of Fannie and Freddie. It proposes a unique model of reform that emphasizes public-private partnership, one that can serve as a blueprint for better organizing and managing government-sponsored enterprises like Fannie Mae and Freddie Mac. In doing so, Guaranteed to Fail strikes a cautionary note about excessive government intervention in markets.
| Author | : Mr.Pau Rabanal |
| Publisher | : International Monetary Fund |
| Total Pages | : 38 |
| Release | : 2009-11-01 |
| Genre | : Business & Economics |
| ISBN | : 1451873980 |
We argue that a stronger emphasis on macrofinancial risk could provide stabilization benefits. Simulations results suggest that strong monetary reactions to accelerator mechanisms that push up credit growth and asset prices could help macroeconomic stability. In addition, using a macroprudential instrument designed specifically to dampen credit market cycles would also be useful. But invariant and rigid policy responses raise the risk of policy errors that could lower, not raise, macroeconomic stability. Hence, discretion would be required.
| Author | : Peter J. N. Sinclair |
| Publisher | : Routledge |
| Total Pages | : 402 |
| Release | : 2009-12-16 |
| Genre | : Business & Economics |
| ISBN | : 1135179778 |
Inflation is regarded by the many as a menace that damages business and can only make life worse for households. Keeping it low depends critically on ensuring that firms and workers expect it to be low. So expectations of inflation are a key influence on national economic welfare. This collection pulls together a galaxy of world experts (including Roy Batchelor, Richard Curtin and Staffan Linden) on inflation expectations to debate different aspects of the issues involved. The main focus of the volume is on likely inflation developments. A number of factors have led practitioners and academic observers of monetary policy to place increasing emphasis recently on inflation expectations. One is the spread of inflation targeting, invented in New Zealand over 15 years ago, but now encompassing many important economies including Brazil, Canada, Israel and Great Britain. Even more significantly, the European Central Bank, the Bank of Japan and the United States Federal Bank are the leading members of another group of monetary institutions all considering or implementing moves in the same direction. A second is the large reduction in actual inflation that has been observed in most countries over the past decade or so. These considerations underscore the critical – and largely underrecognized - importance of inflation expectations. They emphasize the importance of the issues, and the great need for a volume that offers a clear, systematic treatment of them. This book, under the steely editorship of Peter Sinclair, should prove very important for policy makers and monetary economists alike.
| Author | : Mr.Hamid Reza Davoodi |
| Publisher | : International Monetary Fund |
| Total Pages | : 59 |
| Release | : 2013-02-06 |
| Genre | : Business & Economics |
| ISBN | : 1475553498 |
Do changes in monetary policy affect inflation and output in the East African Community (EAC)? We find that (i) Monetary Transmission Mechanism (MTM) tends to be generally weak when using standard statistical inferences, but somewhat strong when using non-standard inference methods; (ii) when MTM is present, the precise transmission channels and their importance differ across countries; and (iii) reserve money and the policy rate, two frequently used instruments of monetary policy, sometimes move in directions that exert offsetting expansionary and contractionary effects on inflation—posing challenges to harmonization of monetary policies across the EAC and transition to a future East African Monetary Union. The paper offers some suggestions for strengthening the MTM in the EAC.
| Author | : |
| Publisher | : |
| Total Pages | : 60 |
| Release | : 1956 |
| Genre | : Housing |
| ISBN | : |
"With a statistical appendix excerpted from the ... annual report" (varies slightly).
