Interest Rate Elasticity of Residential Housing Prices

Plamen Iossifov, Martin Cihak () and Amar Shanghavi
Authors registered in the RePEc Author Service: Пламен Йосифов

No 2008/247, IMF Working Papers from International Monetary Fund

Abstract: We examine the interest rate elasticity of housing prices, advancingthe empirical literature in two directions. First, we take a commonly used cross-country panel dataset and evaluate the housing price equation using a consistent estimator in the presence of endogenous explanatory variables and a lagged dependent variable. Second, we carry-out a novel analysis of determinants of residential housing prices in a cross-section of countries. Our results show that the short-term interest rate, and hence monetary policy, has a sizable impact on residential housing prices.

Keywords: WP; housing price; price; interest rate; quote; elasticity; GDP (search for similar items in EconPapers)
Pages: 32
Date: 2008-10-01
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Citations: View citations in EconPapers (12)

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