Can Non-Interest Rate Policies Stabilize Housing Markets? Evidence from a Panel of 57 Economies

Kuttner, Kenneth; Shim, Ilhyock

doi:10.3386/w19723

Cited by 101 publications

(86 citation statements)

References 2 publications

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“…29 In terms of normalizing the magnitude of these policy shocks, we pick the size of the …scal shocks so that the peak response of output is equal to that from lowering regulatory LTV by 5 percentage points (pp).…”

Section: E¤ects Of …Scal and Macroprudential Policies On Mortgage Debtmentioning

confidence: 99%

Addressing household indebtedness: Monetary, fiscal or macroprudential policy?

Alpanda

Zubairy

2017

European Economic Review

108

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. iii Terms of use: Documents in AbstractIn this paper, we build a dynamic stochastic general-equilibrium model with housing and household debt, and compare the effectiveness of monetary policy, housing-related fiscal policy, and macroprudential regulations in reducing household indebtedness. The model features long-term fixed-rate borrowing and lending across two types of households, and differentiates between the flow and the stock of household debt. We use Bayesian methods to estimate parameters related to model dynamics, while level parameters are calibrated to match key ratios in the U.S. data. We find that monetary tightening is able to reduce the stock of real mortgage debt, but leads to an increase in the household debt-toincome ratio. Among the policy tools we consider, tightening in mortgage interest deduction and regulatory loan-to-value (LTV) are the most effective and least costly in reducing household debt, followed by increasing property taxes and monetary tightening. Although mortgage interest deduction is a broader tool than regulatory LTV, and therefore potentially more costly in terms of output loss, it is effective in reducing overall mortgage debt, since its direct reach also extends to home equity loans. JEL classification: E52, E62, R38 Bank classification: Housing; Transmission of monetary policy; Financial system regulation and policies; Economic models RésuméDans cette étude, les auteurs construisent un modèle d'équilibre général dynamique et stochastique intégrant le logement et la dette des ménages, et comparent l'efficacité de diverses mesures (politique monétaire, fiscalité relative au logement et réglementation macroprudentielle) pour réduire l'endettement des ménages. Le modèle incorpore les emprunts et les prêts à taux fixe à long terme se rapportant à deux types de ménages, et établit une distinction entre les flux de crédit et l'encours de la dette. Les auteurs utilisent des méthodes bayésiennes pour estimer les paramètres liés à la dynamique du modèle, et les paramètres de niveau sont calibrés de manière à ce qu'ils correspondent aux ratios clés calculés à partir de données sur l'économie américaine. Ils constatent que le resserrement de la politique monétaire peut induire une baisse de l'encours de la dette hypothécaire réelle, mais entraîner une augmentation du ratio de la dette au revenu des ménages. Parmi les mesures prises en considération, la réduction de la déduction fiscale au titre des intérêts hypothécaires et l...

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Section: E¤ects Of …Scal and Macroprudential Policies On Mortgage Debtmentioning

confidence: 99%

Addressing household indebtedness: Monetary, fiscal or macroprudential policy?

Alpanda

Zubairy

2017

European Economic Review

108

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show abstract

“…Acolin et al 2016). Other studies have shown the effect of credit constraints, including DTI constraints, on house prices, such as and Kuttner and Shim (2016). Johnson and Li (2010) show that a high DTI is predictive of the consumer having been denied credit.…”

mentioning

confidence: 91%

The Effect of Interest Rates on Home Buying: Evidence from a Discontinuity in Mortgage Insurance Premiums

Bhutta

Ringo

2017

FEDS

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“…Ayrıca makro ihtiyati politikaların asimetrik etkilerin varlığı nedeniyle piyasa başarısızlıklarını engellemede daha etkin olduğunu ortaya koymuşlardır. Kuttner ve Shim (2013), gelişmiş ve gelişmekte olan ülkeler için makro-ihtiyati araçların konut fiyatları ve kredileri üzerindeki etkisini sabit etki panel regresyon ile test etmişlerdir. Analiz sonucunda en başarılı aracın borç-gelir limiti olduğu daha sonra da borç-gelir limiti kadar olmasa da kredi-değer limitinin de etkili olduğu sonucuna varılmıştır.…”

Section: Sektörel öNlemlerunclassified