Home ownership and monetary policy transmission

  • 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.

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Author:Winfried Koeniger, Marc-Antoine Ramelet
URN:urn:nbn:de:hebis:30:3-480529
URL:https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3289948
Parent Title (English):Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 615
Series (Serial Number):CFS working paper series (615)
Publisher:Center for Financial Studies
Place of publication:Frankfurt, M.
Document Type:Working Paper
Language:English
Year of Completion:2018
Year of first Publication:2018
Publishing Institution:Universitätsbibliothek Johann Christian Senckenberg
Release Date:2018/11/29
Tag:Consumption; Home ownership; Housing tenure; Monetary policy transmission
Issue:November 7, 2018
Page Number:68
HeBIS-PPN:43981717X
Institutes:Wirtschaftswissenschaften / Wirtschaftswissenschaften
Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS)
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
Sammlungen:Universitätspublikationen
Licence (German):License LogoDeutsches Urheberrecht