Asymmetric Effects of Monetary Policy in Regional Housing Markets

Knut Are Aastveit and André K. Anundsen

American Economic Journal: Macroeconomics, 2022, vol. 14, issue 4, 499-529

Abstract: The responsiveness of house prices to monetary policy shocks depends on the nature of the shock—expansionary versus contractionary—and on local housing supply elasticities. These findings are established using a panel of 263 US metropolitan areas. Expansionary monetary policy shocks have a larger impact on house prices in supply-inelastic areas. Contractionary shocks are orthogonal to housing supply elasticities. In supply-elastic areas, contractionary shocks have a greater impact on house prices than expansionary shocks do. The opposite holds true in supply-inelastic areas. We attribute this to asymmetric housing supply adjustments.

JEL-codes: E32 E43 E52 R21 R31 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (15)

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Related works:
Working Paper: Asymmetric effects of monetary policy in regional housing markets (2018)
Working Paper: Asymmetric effects of monetary policy in regional housing markets (2017)
Working Paper: Asymmetric effects of monetary policy in regional housing markets (2017)
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DOI: 10.1257/mac.20190011

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