Dust flux, Vostok ice core

Dust flux, Vostok ice core
Two dimensional phase space reconstruction of dust flux from the Vostok core over the period 186-4 ka using the time derivative method. Dust flux on the x-axis, rate of change is on the y-axis. From Gipp (2001).

Thursday, February 21, 2013

IMF position on global housing prices--no impact from monetary policy

A recent IMF working paper entitled Global House Price Fluctuations: Synchronization and Determinants (pdf) attempts to look for the reasons behind global linkages in house prices.

Of interest is their conclusions (handily in the summary)--"Global interest rate shocks tend to have a significant negative effect on global house prices whereas global monetary policy shocks per se do not . . ."

And yet these graphs comparing growth rates (annual?) appear on page 39 (not next to each other)



The two curves are practically identical. So it would seem that change in house prices is strongly controlled by changes in available credit. 

Isn't this tied to monetary policy?

1 comment:

  1. Monetary policy is supposed to work by changing interest rates. If you account for how changes in interest rates affect house prices and then try to use monetary policy to explain the residual (after accounting for interest rates), there is probably no effect left.

    This is technically true, but not insightful. Some idiot probably realized they couldn't run a regression with two highly correlated variables and decided to leave in interest rates instead of monetary policy.

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