House prices, credit and the effect of monetary policy in Norway: evidence from structural VAR models

Ørjan Robstad ()
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Ørjan Robstad: Norges Bank

Empirical Economics, 2018, vol. 54, issue 2, No 6, 483 pages

Abstract: Abstract This paper investigates the responses of house prices and household credit to monetary policy shocks in Norway, using Bayesian structural VAR models. The analysis indicates that the effect of a monetary policy shock on house prices is large, while the effect on household credit is muted. This is consistent with a relatively small refinancing rate (refinancing rate refers to the share of outstanding mortgages that are refinanced each period due to changes in, for example, house prices or interest rate) of the mortgage stock each quarter. Using monetary policy to guard against financial instability by mitigating property-price movements may prove effective, but trying to mitigate household credit may prove costly in terms of GDP and inflation variation.

Keywords: House prices; Credit; Monetary policy; Structural VAR (search for similar items in EconPapers)
JEL-codes: E32 E37 E44 E52 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (13)

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DOI: 10.1007/s00181-016-1222-1

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