House Prices and the Macroeconomy

Implications for Banking and Price Stability

Charles Goodhart author Boris Hofmann author

Format:Hardback

Publisher:Oxford University Press

Published:21st Dec '06

Currently unavailable, and unfortunately no date known when it will be back

House Prices and the Macroeconomy cover

House price bubbles, and their aftermath, have become a focus of macro-economic policy concern in most developed countries. This book elucidates the two-way relationship between house-price fluctuations and economic fundamentals. Housing has many features which make it distinct from other assets, like equity. Real estate is not only an asset but also a durable consumption good for households, providing shelter and other housing services. As a result, a house is often the largest and most important asset of households and therefore accounts for a major share of household wealth. Similarly a large share of bank assets is tied to housing values. House price fluctuations may, therefore, have a major effect on economic activity and the soundness of the financial system. Following an introductory chapter, the book is structured into three parts. The first demonstrates the importance of house prices as determinants or indicators of inflation and economic activity. The second focuses on the inter-relationships between bank credit extension and housing prices, and how bubbles can lead to financial crises. The third discusses resultant public policy issues, such as whether, and how, to include housing prices in a general inflation index, and how to restrain the housing/bank credit cycle.

ISBN: 9780199204595

Dimensions: 250mm x 180mm x 30mm

Weight: 1g

256 pages