Housing and monetary policy
By: John B. Taylor.
Contributors: National Bureau of Economic Research.
Series: NBER working paper series -- working paper 13682; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 13682.
Publisher: National Bureau of Economic Research
Published: 2007
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "Since the mid-1980s, monetary policy has contributed to a great moderation of the housing cycle by responding more proactively to inflation and thereby reducing the boom bust cycle.  However, during the period from 2002 to 2005, the short term interest rate path deviated significantly from what this two decade experience would suggest is appropriate.  A counterfactual simulation with a simple model of the housing market shows that this deviation may have been a cause of the boom and bust in housing starts and inflation in the last two years.  Moreover, a significant time series correlation between housing price inflation and delinquency rates suggests that the poor credit assessments on subprime mortgages may also have been caused by this deviation"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 6/5/2008.

Includes bibliographical references.

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