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Home ownership and monetary policy transmission

Winfried Koeniger and Marc-Antoine Ramelet

No 615, CFS Working Paper Series from Center for Financial Studies (CFS)

Abstract: We present empirical evidence on the heterogeneity in monetary policy transmission across countries with different home ownership rates. We use household-level data together with shocks to the policy rate identified from high-frequency data. We find that housing tenure reacts more strongly to unexpected changes in the policy rate in Germany and Switzerland - the OECD countries with the lowest home ownership rates - compared with existing evidence for the U.S. An unexpected decrease in the policy rate by 25 basis points increases the home ownership rate by 0.8 percentage points in Germany and by 0.6 percentage points in Switzerland. The response of non-housing consumption in Switzerland is less heterogeneous across renters and mortgagors, and has a different pattern across age groups than in the U.S. We discuss economic explanations for these findings and implications for monetary policy.

Keywords: Monetary policy transmission; Home ownership; Housing tenure; Consumption (search for similar items in EconPapers)
JEL-codes: E21 E52 R21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac and nep-ure
Date: 2018
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https://www.econstor.eu/bitstream/10419/187490/1/1041104871.pdf (application/pdf)

Related works:
Working Paper: Home Ownership and Monetary Policy Transmission (2018) Downloads
Working Paper: Home Ownership and Monetary Policy Transmission (2018) Downloads
Working Paper: Home Ownership and Monetary Policy Transmission (2018) Downloads
Working Paper: Home Ownership and Monetary Policy Transmission (2018) Downloads
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