Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/173021
Authors: 
Hofmann, Boris
Peersman, Gert
Year of Publication: 
2017
Series/Report no.: 
CESifo Working Paper 6745
Abstract: 
This study shows that, in the United States, the effects of monetary policy on credit and housing markets have become considerably stronger relative to the impact on GDP since the mid-1980s, while the effects on inflation have become weaker. Macroeconomic stabilization through monetary policy may therefore have become associated with greater fluctuations in credit and housing markets, whereas stabilizing credit and house prices may have become less costly in terms of macroeconomic volatility. These changes in the aggregate impact of monetary policy can be explained by several important changes in the monetary transmission mechanism and in the composition of macroeconomic and credit aggregates. In particular, the stronger impact of monetary policy on credit is driven by a much higher responsiveness of mortgage credit and a larger share of mortgages in total credit since the 1980s.
Subjects: 
monetary policy trade-offs
monetary transmission mechanism
inflation
credit
house prices
JEL: 
E52
Document Type: 
Working Paper
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