Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/65864 
Year of Publication: 
2012
Series/Report no.: 
W.E.P. - Würzburg Economic Papers No. 90
Publisher: 
University of Würzburg, Department of Economics, Würzburg
Abstract: 
This paper evaluates business cycle and welfare effects of cross-country mortgage market heterogeneity for a monetary union. By employing a calibrated two-country New Keynesian DSGE model with collateral constraints tied to housing values, we show that a change in cross-country institutional characteristics of mortgage markets, such as the LTV ratio, is likely to be an important driver of an asymmetric development in housing markets and real economic activity of member states. Our welfare analysis suggests that the welfare of the home country where the reform is implemented increases substantially. In contrast, the rest of the EMU's welfare falls due to spillover effects with magnitude depending on the size of the home country.
Subjects: 
housing
LTV ratio
monetary union
cross-country heterogeneity
JEL: 
E32
E44
F41
Document Type: 
Working Paper

Files in This Item:
File
Size
195.52 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.