Home Ownership and Monetary Policy Transmission

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 11950

Classification and Topics

• Classification: Wirtschaft ; Macroeconomics: Consumption; Saving; Wealth ; Monetary Policy ; Urban, Rural, Regional, Real Estate, and Transportation Economics: Housing Demand
• Subject: monetary policy transmission ; home ownership ; housing tenure ; consumption

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Koeniger, Winfried ; Ramelet, Marc-Antoine
• Event: Veröffentlichung
• (who): Institute of Labor Economics (IZA)
• (where): Bonn
• (when): 2018

Further information

• Handle: http://hdl.handle.net/10419/193244
• Last update: 10.03.2025, 11:45 AM CET