The Quest for Stability in Housing Markets

AuthorHites Ahir
Pages4-9
IMFIMF
Volume 17, Number 1 March 2016
www.imf.org/researchbulletin
B U L L E T I N
1
The Quest for Stability in Housing Markets
Hites Ahir
Recent developments in g lobal house prices have led to seemingly
contradictory concer ns about both overheating and slow
recovery, refle cting house price boom s in some countries and
declining prices in others . This note discusses developments
in global housing market s since the Great Recession—
drawing on IMF staff as sessments—and it also discusses
attempts by policymak ers to maintain stability in housing markets through
macroprudentialpolicies.
Housing Markets: A Global Overview
On average, global house prices conti nue to march upward slowly (IMF 2016).
The IMF’s Global House Price Index—a simple average of real house price s for
64 countries—has ed ged higher for the past six teen quarters (Figure 1). There
is also a clear shi ft in momentum: between mid-2007 and mid-2012, far more
countries had declin ing real house prices than increasing prices , but since
mid-2012, these trends have reversed.
Explaining the Recent Slump in Investment:
The Role of Expected Demand and Uncertainty*
Matthieu Bussière, Laurent Ferrara, and Juliana Milovich
The recent weakness in bu siness
investment among advanced
economies has revived inte rest
in investment models and ha s
opened a debate on the main
drivers of the “inves tment
slump” and what the policy response should be , if any. In particular, it is essential
to assess precise ly whether the investment slump stems mos tly from weak aggregate
demand, financ ial constraints or uncertainty, as these different e xplanatory
factors have different polic y implications. This paper presents an empirica l
investigation of the main determinant s of business investment for a panel of 22
advanced economies. The m ain contribution is that we present re sults from an
augmented accelerator mode l using vintage forecast data as a measure of exp ected
demand and show that this for ward-looking variable goes a long way in e xplaining
In This Issue
1 Explaining the Recent
Slump in Investment:
The Role of Expected
Demand and Uncertainty
1 The Qu est for Stability
in Housing Markets
9 Q&A: Seven Questions on
Estimating the Monetary
Transmission Mechanism
in Low-Income Countries
14 IMF Working Papers
18 IMF Economic Review
19 Recommended Readings
from IMF Publications
20 Staff Discussion Notes
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Research Summaries
* This articl e summarizes the Banque d e France Working Paper No. 571. The views presented in
this paper are those of t he authors and do not necessa rily reflect thos e of the Banque de France or
the Eurosystem.

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