Housing Market Heterogeneity in a Monetary Union

Rubio, Margarita

doi:10.2139/ssrn.1458956

Cited by 67 publications

(45 citation statements)

References 53 publications

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“…This parameter re ‡ects the di¤erences between Spain and the Euro area in terms of the ratio of housing wealth to GDP. 40 We set = 2, implying that the labor supply elasticity has a value of 1: 41 Following Horvath (2000) and…”

Section: Parameter Valuesmentioning

confidence: 99%

“…Total welfare is de…ned as a weighted sum of the welfare in the two countries: Table 1 presents the optimized parameters for the macroprudential rules, in particular for those described in equations (39) and (40). We take monetary policy as given and determine the parameters that maximize welfare for the two cases mentioned above, i.e.…”

Section: Welfare Measurementioning

confidence: 99%

“…The basic modeling framework in this paper follows Rubio (2014), although we add macroprudential measures. Our paper relates to di¤erent strands of the literature.…”

Section: Introductionmentioning

confidence: 99%

“…The model constitutes a two-country, two-sector version of the seminal paper of Iacoviello (2005), which introduces a …nancial accelerator that works through the housing sector, in line with Aspachs and Rabanal (2010). However, this paper introduces cross-country housing market heterogeneity, as in Rubio (2014). In addition, this paper is related to the recent literature on macroprudential and monetary policies in Iacoviello-type models,…”

Section: Introductionmentioning

confidence: 99%

“…(2011), and Mora-Sanguinetti and Rubio (2014). However, none of these models consider the study of macroprudential policies in Spain in relation to the rest of the Euro area.…”

Section: Introductionmentioning

confidence: 99%

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Coordinating macroprudential policies within the Euro area: The case of Spain

Rubio

Carrasco-Gallego²

2016

Economic Modelling

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In the aftermath of the global …nancial crisis, there is consensus on the need for macroprudential policies to promote …nancial stability. However, the optimal way to implement such policies in the Euro area is a question open to debate, given that countries have to coordinate. In this paper, we propose a two-country, two-sector monetary union dynamic stochastic general equilibrium model (DSGE) with housing to analyze the optimal implementation of macroprudential policies in the Euro area. Currently, Spain is the only country within the EU that has not established a macroprudential regulator. We use Spain as a natural experiment to study the e¤ects of a lack of coordination in the use of macroprudential policies in the European Monetary Union (EMU). We focus on a particular macroprudential policy, a rule regarding the loan-to-value ratio, which responds countercyclically to credit booms. We …nd that such a policy is welfare enhancing for the Euro area. Nevertheless, if one country does not implement the policy, but the rest of the EMU does, as in the current situation with Spain, this country still yields some bene…ts as a result of its partners'implementation of the policy because it gains from a more stable …nancial system without incurring any output costs. However, if all Euro countries actively implement the policy, the welfare gains for all of them are larger.

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Section: Parameter Valuesmentioning

confidence: 99%

Section: Welfare Measurementioning

confidence: 99%

“…The basic modeling framework in this paper follows Rubio (2014), although we add macroprudential measures. Our paper relates to di¤erent strands of the literature.…”

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

“…(2011), and Mora-Sanguinetti and Rubio (2014). However, none of these models consider the study of macroprudential policies in Spain in relation to the rest of the Euro area.…”

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Coordinating macroprudential policies within the Euro area: The case of Spain

Rubio

Carrasco-Gallego²

2016

Economic Modelling

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Does the rental housing market stabilize the economy? A micro and macro perspective

Rubaszek

Rubio

2019

Empir Econ

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The size of the rental housing market in most countries around the globe is small. In this article, we claim that this may be detrimental to macroeconomic stability. We do it in three steps. First, using survey data for Poland, a country with a high homeownership ratio, we discuss microeconomic housing tenure choice determinants. Second, with a panel of 28 EU countries over the period 2004-2017, we provide evidence that the response of house prices to macroeconomic fundamentals is attenuated by the size of the private rental market. Third, we propose a DSGE model in which households satisfy housing needs both by owning and by renting. By simulating the model, we show that reforms enhancing the rental housing market contribute to macroeconomic stability. We conclude by formulating policy recommendations.

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The Size of the Rental Market and Housing Market Fluctuations

Czerniak

Rubaszek

2018

Open Econ Rev

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The paper investigates whether the size of the rental market affects house prices fluctuations or the volatility of construction sector activity over the business cycle. For that purpose we construct a database of variables describing the housing sector in a group of twelve initial euro area members and ten other OECD countries over the years 1995-2014 and conduct a series of panel regressions. We find that a developed rental market attenuates fluctuations in the housing sector, especially for the common currency area sample. We claim that differences among monetary union countries in terms of rental market developments can be destabilizing as they might lead to heterogeneous response to common shocks.

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Housing Market Heterogeneity in a Monetary Union

Cited by 67 publications

References 53 publications

Coordinating macroprudential policies within the Euro area: The case of Spain

Coordinating macroprudential policies within the Euro area: The case of Spain

Does the rental housing market stabilize the economy? A micro and macro perspective

The Size of the Rental Market and Housing Market Fluctuations

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