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House prices and monetary policy
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Orientador(es)
Resumo(s)
This paper analyzes global dynamics in an overlapping generations general equilibrium model with housing-wealth effects. It demonstrates that monetary policy cannot burst rational bubbles in the housing market. Under monetary policy rules of the Taylor-type, there exist global self-fulfilling paths of house prices along a heteroclinic orbit connecting multiple equilibria. From bifurcation analysis, the orbit features a boom (bust) in house prices when monetary policy is more (less) active. The paper also proves that booms or busts cannot be ruled out by interest-rate feedback rules responding to both inflation and house prices.
Descrição
Palavras-chave
Equilibrium Dynamics Global Determinacy Heteroclinic Orbits House Prices Housing-Wealth Effects Monetary Policy Rules
Contexto Educativo
Citação
Brito, Paulo; Giancarlo Marini and Alessandro Piergallini .(2016). “House prices and monetary policy “, Studies in Nonlinear Dynamics & Econometrics, Volume 20, No. 3: pp. 251–277. DE GRYTER. (Search PDF in 2024).
Editora
DE GRYTER