Money and housing: evidence for the euro area and the US

Claus Greiber and Ralph Setzer

No 2007,12, Discussion Paper Series 1: Economic Studies from Deutsche Bundesbank, Research Centre

Abstract: This paper examines the relation between money and housing variables in the euro area and in the US. Our empirical model is based on a standard money demand relation which is augmented by housing market variables. In doing so, co-integrated money demand relationships can be established for both the euro area and the US. Furthermore, we find evidence for asset inflation channels, that is, liquidity fuels housing market developments.

Keywords: money demand; asset inflation; housing; wealth (search for similar items in EconPapers)
JEL-codes: E41 E52 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-eec, nep-mac, nep-mon and nep-ure
Date: Written 2007
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