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House Bubbles, Global Imbalances And Monetary Policy In The Us, Anastasios Evgenidis, A. (Tassos) G. Malliaris
House Bubbles, Global Imbalances And Monetary Policy In The Us, Anastasios Evgenidis, A. (Tassos) G. Malliaris
School of Business: Faculty Publications and Other Works
This paper examines the factors driving housing price exuberance in the United States, specifically the influence of expansionary monetary policies and the global saving glut. We employ medium scale Bayesian VAR and time-varying VAR models to estimate the effects of monetary policy and global saving glut shocks on US housing bubbles. We find that, prior to the Global Financial Crisis, the impact of the saving glut shock is more enduring, powerful, and rapid in generating housing bubbles compared to monetary policy shocks. However, the recent housing boom that commenced in 2019 demonstrates a different pattern. Our results suggest that both …