The Impact of Unconventional Monetary Policy on Real Estate Markets
36 Pages Posted: 11 Sep 2014 Last revised: 11 Nov 2017
Date Written: November 10, 2017
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: Suggested Citation