What Role Did The Monetary Policy Play In The Housing Market Development Case Study
What role did the setting of the monetary policy play in the housing market development?
This essay talked about the role the setting of monetary policy play in housing market development based on the working paper entitled “ Monetary Policy and the Housing Bubble” from Finance and Economic Discussion Series Divisions of Research & Statistic and Monetary Affairs Federal Reserve Board. Many research suggest that monetary policy was a primary cause of the bubble in house prices and activity. In order to find out about that, we need to go way back to monetary policy rules from 2003 through 2006.
According to the paper, the investment in residence in the US had average about 4,5% of GDP from 1974 to 2002, and it increase to 6.25% of GDP by late
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