Can Non-Interest Rate Policies Stabilize Housing Markets? Evidence from a Panel of 57 Economies

Kenneth Kuttner and Ilhyock Shim

No 19723, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Using data from 57 countries spanning more than three decades, this paper investigates the effectiveness of nine non-interest rate policy tools, including macroprudential measures, in stabilizing house prices and housing credit. In conventional panel regressions, housing credit growth is significantly affected by changes in the maximum debt-service-to-income (DSTI) ratio, the maximum loan-to-value ratio, limits on exposure to the housing sector and housing-related taxes. But only the DSTI ratio limit has a significant effect on housing credit growth when we use mean group and panel event study methods. Among the policies considered, a change in housing-related taxes is the only policy tool with a discernible impact on house price appreciation.

JEL-codes: G21 G28 R31 (search for similar items in EconPapers)
Date: 2013-12
New Economics Papers: this item is included in nep-ban, nep-cba, nep-mac and nep-ure
Note: ME
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Citations: View citations in EconPapers (129)

Published as Kenneth N. Kuttner & Ilhyock Shim, 2016. "Can non-interest rate policies stabilize housing markets? Evidence from a panel of 57 economies," Journal of Financial Stability, .

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Journal Article: Can non-interest rate policies stabilize housing markets? Evidence from a panel of 57 economies (2016)
Working Paper: Can non-interest rate policies stabilise housing markets? Evidence from a panel of 57 economies (2013)
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