Norges Bank

Working Paper

House prices, credit and the effect of monetary policy in Norway: Evidence from Structural VAR Models

Author:
By Ørjan Robstad
Series:
Working Paper
Number:
5/2014

This paper investigates the responses of house prices and household credit to monetary policy shocks in Norway, using Bayesian structural VAR models. I find that the effect of a monetary policy shock on house prices is large, while the effect on household credit is muted. This is consistent with a relatively small refinancing rate of the mortgage stock each quarter. Using monetary policy to guard against - financial instability by mitigating property-price movements may prove effective, but trying to mitigate household credit may prove costly in terms of GDP and inflation variation.

 

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ISSN 1502-8190 (online)

Published 15 May 2014 10:30
Published 15 May 2014 10:30