Arbeitspapier
Monetary policy, housing, and collateral constraints
House-purchasing decisions and the possibility of existing homeowners to tap into their housing equity depend decisively on prevailing loan-to-value (LTV) ratios in mortgage markets with borrowing constrained households. Utilizing a smooth transition local projection (STLP) approach, I show that monetary policy shocks in the U.S. evoke stronger reactions in the housing sector in times of high LTV ratios, which, through changes in mortgage lending and mortgage equity withdrawals (MEWs), translate into larger effects of consumption. This result is more pronounced for contractionary shocks, in line with occasionally binding constraints. The strong procyclicality of LTV ratios reconciles these findings with past evidence on a less powerful transmission of monetary policy during recessions.
- ISBN
-
978-3-95729-547-7
- Sprache
-
Englisch
- Erschienen in
-
Series: Deutsche Bundesbank Discussion Paper ; No. 02/2019
- Klassifikation
-
Wirtschaft
Macroeconomics: Consumption; Saving; Wealth
Monetary Policy
Banks; Depository Institutions; Micro Finance Institutions; Mortgages
Housing Supply and Markets
- Thema
-
monetary policy
LTV ratio
mortgage equity withdrawals
collateral constraints
local projections
non-linear impulse responses
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Franz, Thorsten
- Ereignis
-
Veröffentlichung
- (wer)
-
Deutsche Bundesbank
- (wo)
-
Frankfurt a. M.
- (wann)
-
2019
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:45 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Franz, Thorsten
- Deutsche Bundesbank
Entstanden
- 2019
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