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Monetary policy and regional price boom in Sweden

Author

Listed:
  • Yang, Zan
  • Wang, Songtao
  • Campbell, Robert
Abstract
This study measures the heterogeneous effects of monetary policy on regional house prices in Sweden 1991-2002. We use a multivariate persistent shock metric to examine the impact of short-term interest rate on the property market. We also segregate the influence of interest rate shocks and influence of local shocks to capture their respective effects on regional price boom. We find significant regional effect of monetary policy on housing markets. Interest rate effects dominate the influence of local price innovations in the core economic regions in Sweden. We further discuss the monetary transmission channels and highlight political implications.

Suggested Citation

  • Yang, Zan & Wang, Songtao & Campbell, Robert, 2010. "Monetary policy and regional price boom in Sweden," Journal of Policy Modeling, Elsevier, vol. 32(6), pages 865-879, November.
    • Handle: RePEc:eee:jpolmo:v:32:y::i:6:p:865-879
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    4. Zhang, Yanbing & Hua, Xiuping & Zhao, Liang, 2011. "Monetary policy and housing prices : a case study of Chinese experience in 1999-2010," BOFIT Discussion Papers 17/2011, Bank of Finland, Institute for Economies in Transition.
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    7. Gustafsson, Peter & Stockhammar, Pär & Österholm, Pär, 2016. "Macroeconomic effects of a decline in housing prices in Sweden," Journal of Policy Modeling, Elsevier, vol. 38(2), pages 242-255.
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    10. I-Chun Tsai, 2017. "The housing market and excess monetary liquidity in China," Empirical Economics, Springer, vol. 53(2), pages 599-615, September.
    11. Shen, Chung-Hua & Lin, Kun-Li & Guo, Na, 2016. "Hawk or dove: Switching regression model for the monetary policy reaction function in China," Pacific-Basin Finance Journal, Elsevier, vol. 36(C), pages 94-111.
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