Published and unpublished papers by Wei Xiao

Learning About Monetary Policy Rules When the Housing Market Matters

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Journal of Economic Dynamics and Control, Journal of Economic Dynamics and Control (2013), Vol. 37, Issue 3. (download)

In this paper we study a general equilibrium model with a housing market, and use stability under adaptive learning as a criterion to evaluate monetary policy rules. An important feature of the model is that there exist credit-constrained borrowers who use their housing assets as collateral to Önance purchases. We evaluate both conventional Taylor rules and rules that incorporate other targets such as housing prices. We Önd that the e§ect of responding to hous- ing prices, in addition to output and ináation, depends critically on the assumed information structure of the economy.


Written by wxiao

July 24, 2011 at 9:40 pm

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