What the study found
Housing markets are a central channel through which monetary policy shocks affect the real economy, and real house prices show the largest and most persistent responses. The study also finds asymmetry: contractionary shocks have larger and longer-lasting effects than expansionary ones, especially in housing.
Why the authors say this matters
The authors conclude that housing dynamics should be more systematically integrated into monetary and macroprudential policy frameworks. They say this is especially important given the persistent vulnerabilities linked to ultra-low interest rates and money supply expansions.
What the researchers tested
The researchers studied twelve European countries from 1995Q1 to 2025Q2. They used a pooled panel Vector Autoregression model with sign restrictions to identify the effects of interest rate shocks, money supply (M3) shocks, and a combined policy mix on real output, inflation, and housing markets.
What worked and what didn't
The analysis confirms that monetary policy shocks transmit through housing markets to the broader economy. Real house prices responded more strongly and for longer than output and general price levels, and contractionary shocks produced larger and longer-lasting effects than expansionary shocks.
What to keep in mind
The abstract does not describe limitations in detail. The findings are reported for the twelve European countries and the period studied, so the summary is limited to that scope.
Key points
- Housing markets are identified as a central channel for monetary policy transmission.
- Real house prices showed the strongest and most persistent responses.
- Contractionary shocks had larger and longer-lasting effects than expansionary shocks.
- The study examined twelve European countries from 1995Q1 to 2025Q2.
- The authors say housing dynamics should be integrated into monetary and macroprudential policy frameworks.
Disclosure
- Research title:
- European housing markets mediate monetary policy effects
- Authors:
- Daniel Rodríguez-Asensio, Ana M. López-García
- Institutions:
- Universidad Autónoma de Madrid
- Publication date:
- 2026-03-03
- OpenAlex record:
- View
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