Optimal interest rate rule in a DSGE model with housing market spillovers

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review

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Author(s)

  • Xiaojin Sun
  • Kwok Ping Tsang

Detail(s)

Original languageEnglish
Pages (from-to)47-51
Journal / PublicationEconomics Letters
Volume125
Issue number1
Publication statusPublished - Oct 2014
Externally publishedYes

Abstract

This paper studies the optimal interest rate rule in a DSGE model with housing market spillovers (Iacoviello and Neri, 2010). We find that the optimal rule responds to house price inflation even when the stabilization of house price is not among the objectives of the policymaker, and that the strength of the response depends crucially on a few structural parameters. © 2014 Elsevier B.V.

Research Area(s)

  • DSGE model, House price inflation, Optimal interest rate rule

Citation Format(s)

Optimal interest rate rule in a DSGE model with housing market spillovers. / Sun, Xiaojin; Tsang, Kwok Ping.

In: Economics Letters, Vol. 125, No. 1, 10.2014, p. 47-51.

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review