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Housing, household debt and policy conference 2017

We hosted a conference 11–12 December 2017 to discuss housing, household debt and policy.

Past Event
Monday, 11 December 2017 to Tuesday, 12 December 2017
9:00 am - 5:00 pm
Wellington, New Zealand


High house prices and modest income growth create significant tensions and distributional issues across generations. Elevated household debt and high house prices, combined with subdued inflation outcomes, also pose a challenge for both monetary and macroprudential policy.

We invited submissions of theoretical and empirical papers that explored:

  • the dynamics of housing markets and household debt
  • the implications of housing cycles for the macro economy
  • the consequences of those dynamics for monetary and macropudential policy.

Questions of interest might have included:

  • What drives residential investment and household mortgage choice?
  • How do developments in house prices affect economic inequality?
  • How do housing market dynamics influence consumption and saving behaviour?
  • How does household debt and/or leverage affect mortgage default risk and financial stability?
  • How does household debt influence the transmission of monetary policy?
  • What is the optimal mix of monetary, macroprudential and other policies?
  • And should distributional considerations influence monetary and macroprudential policymaking

Keynote speakers

Christopher Carroll (Johns Hopkins University)
Greg Kaplan (University of Chicago)
Dirk Krueger (University of Pennsylvania)


Session 1: Keynote 1

Session chair: Christie Smith (Reserve Bank of New Zealand)

The normal science of heterogeneous agents macroeconomics
Presented by: Christopher Carroll (Johns Hopkins University)

Session 2: Housing markets and macroeconomy

Session chair: Anella Munro (Reserve Bank of New Zealand)

Housing finance, boom-bust episodes and the macroeconomy
Presented by: Carlos Garriga (Federal Reserve Bank of St Louis)
Discussant: Andrew Coleman (University of Chicago)

Consumption responses to house price heterogeneity
Presented by: James Graham (New York University)
Discussant: Karsten Chipeniuk (Reserve Bank of New Zealand)

Session 3: Household debt and consumption spending

Session chair: Karsten Chipeniuk (Reserve Bank of New Zealand)

Household leverage and the housing wealth effect
Presented by: Fang Yao (Reserve Bank of New Zealand)
Discussant: Carlos Garriga (Federal Reserve Bank of St Louis)

The effect of rising household debt on spending in Australia
Presented by: Fiona Price (Reserve Bank of Australia)
Discussant: Selva Baziki (Central Bank of the Republic of Turkey)

  • Paper and slides are not available.

Session 4: Keynote 2

Session chair: Fang Yao (Reserve Bank of New Zealand)

Intergenerational redistribution in the great recession
Presented by: Dirk Krueger (University of Pennsylvania)

Session 5: Keynote 3

Session chair: Robert Kirkby (Victoria University of Wellington)

What would you do with $500? Spending responses to gains, losses, news and loans
Presented by: Greg Kaplan (University of Chicago), joint with Andreas Fuster and Basit Zafar

Session 6: The role of housing and its implications for policies

Session Chair: Punnoose Jacob (Reserve Bank of New Zealand)

Monetary policy, heterogeneity and the housing channel
Presented by: Aaron Hedlund (University of Missouri)
Discussant: Robert Kirkby (Victoria University of Wellington)

Tax, credit constraints and the big costs of small inflation
Presented by: Andrew Coleman (University of Otago)
Discussant: Aaron Hedlund (University of Missouri)

Session 7: Understand the drivers of housing market

Session chair: Ashley Dunstan (Reserve Bank of New Zealand)

Temptation, commitment and hand-to-mouth consumers
Presented by: Patrick Moran (University of Oxford)
Discussant: Fang Yao (Reserve Bank of New Zealand)

Negative gearing tax and welfare: A quantitative study for the Australian housing market
Presented by: Yunho Cho (University of Melbourne)
Discussant: Fiona Price (Reserve Bank of Australia)

Session 8: Credit and mortgage default

Session chair: John McDermott (Reserve Bank of New Zealand)

What drives metropolitan house prices in California
Presented by: Lasse Bork (Aalborg University)
Discussant: Kirdan Lees (Sense Partners)

Do loan-to-value caps generate additional general-purpose loans?
Presented by: Selva Baziki (Central Bank of the Republic of Turkey)
Discussant: Ashley Dunstan (Reserve Bank of New Zealand)