Housing market connectedness and transmission of monetary policy

Woo Suk Lee and Eunseong Ma

Economic Inquiry, 2025, vol. 63, issue 3, 961-984

Abstract: This paper investigates whether interconnectivity among local housing markets influences the effectiveness of the (United States) U.S. monetary transmission mechanism. We construct measures of housing market connectedness and employ a state‐dependent local projection method to estimate nonlinear impulse responses of macroeconomic variables to monetary policy (MP) shocks. The findings show that MP has a greater impact when regional housing markets are more synchronized. Higher interconnectivity amplifies spillover effects across local markets, enhancing MP effectiveness. Additionally, we find that MP is particularly effective when highly connected states experience economic expansion.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/ecin.13292

Related works:
Working Paper: Housing Market Connectedness and Transmission of Monetary Policy (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:ecinqu:v:63:y:2025:i:3:p:961-984

Ordering information: This journal article can be ordered from
https://ordering.onl ... s.aspx?ref=1465-7295

Access Statistics for this article

Economic Inquiry is currently edited by Tim Salmon

More articles in Economic Inquiry from Western Economic Association International Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().