A DSGE-based assessment of nonlinear loan-to-Value policies : Evidence from Hong Kong

Show full item record

Title: A DSGE-based assessment of nonlinear loan-to-Value policies : Evidence from Hong Kong
Author: Funke, Michael ; Paetz, Michael
Organization: Bank of Finland
Department / Unit: Institute for Economies in Transition (BOFIT)
Series: BOFIT Discussion Papers
Series number: 11/2012
Year of publication: 2012
Publication date: 30.4.2012
Pages: 26 s.
Keywords: kuplat; sääntely; luotot; mallit; asunnot; hinnat; Kiina; inflaatio; Bofit-kokoelma; Hong Kong; DSGE; LTV
JEL: C63; E21; E32; E69; F41
Abstract: In the wake of the 2008-2009 global financial crisis, the macroeconomic discussion has returned to the topic of proactive macroprudential policies. One proactive approach, the use of loan-to-value (LTV) policies to curb booming property markets, has long been used by Hong Kong's monetary authorities to actively manage and mitigate the potential fallout from housing price bubbles. Here, we analyse the merits of this countercyclical macroprudential policy in a New Keynesian DSGE model. We conclude that nonlinear LTV policy rules implemented in reaction to episodes of high property price inflation can limit transmission of housing price cycle effects to the real economy. Keywords: Macroprudential policy, DSGE model, loan-to-value ratio, Hong Kong. JEL classification: C63, E21, E32, E69, F41.
Rights: https://helda.helsinki.fi/bof/copyright


Files in this item

Total number of downloads: Loading...

Files Size Format View
170300.pdf 596.0Kb PDF View/Open

This item appears in the following Collection(s)

Show full item record