The Impact of Unconventional Monetary Policy on Real Estate Markets

36 Pages Posted: 11 Sep 2014 Last revised: 11 Nov 2017

See all articles by Stuart A. Gabriel

Stuart A. Gabriel

University of California, Los Angeles - Anderson School of Management

Chandler Lutz

Copenhagen Business School

Date Written: November 10, 2017

Abstract

This paper examines the heterogeneous effects of unconventional monetary pol icy on housing default and foreclosure across subprime and prime regions. Using both daily and monthly data and various identification schemes, we find that expansionary unconventional monetary policy shocks reduce foreclosures and have out-sized impacts in subprime regions. An examination of the underlying economic mechanisms shows that employment increases play a pivotal role in monetary pol icy induced foreclosure reductions, in line with theory. Overall, findings document how Fed policy reached hard-hit areas during the housing crisis.

Keywords: Unconventional Monetary Policy

JEL Classification: E52, E58, R20, R30

Suggested Citation

Gabriel, Stuart A. and Lutz, Chandler, The Impact of Unconventional Monetary Policy on Real Estate Markets (November 10, 2017). Available at SSRN: https://ssrn.com/abstract=2493873 or http://dx.doi.org/10.2139/ssrn.2493873

Stuart A. Gabriel

University of California, Los Angeles - Anderson School of Management ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States
310-825-2922 (Phone)
310-206-5455 (Fax)

HOME PAGE: http://www.anderson.ucla.edu

Chandler Lutz (Contact Author)

Copenhagen Business School ( email )

Solbjerg Plads 3
Frederiksberg C, DK - 2000
Denmark

HOME PAGE: http://chandlerlutz.com/

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