a column by James Cloyne, Kilian Huber, Ethan Ilzetzki and Henrik Kleven for VOX: CEPR’s Policy Portal
House prices are strongly correlated with borrowing, but little is known about which one is causing the other.
The column uses UK house price data between 2005 and 2015, and also exploits unusual features of the UK mortgage market, to show that a 10% rise in house prices led to a 2% rise in the amount of equity extracted. This is mostly because higher house prices could be used as collateral.
Continue reading
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment