September 2022 issue contents
Monetary Policy and Regional House-Price Appreciation

Daniel Cooper, María José Luengo-Prado, and Giovanni P. Olivei
Federal Reserve Bank of Boston


This paper examines the link between monetary policy and house-price appreciation by exploiting the fact that monetary policy is set at the national level, but the relative stance of policy can differ across U.S. states. This difference provides an exogenous source of variation to assess the effect of monetary policy on state-level housing prices. Monetary policy has an economically meaningful effect on state-level house-price growth - an effect that is nearly three times as large during the early 2000s housing boom as in non-boom years.

JEL Code: E52, E58, E43, R31.

Full article (PDF, 55 pages)