Housing, household debt and policy
Date: 11-12 December 2017
Location:Wellington, New Zealand
On 11-12 December 2017, the Reserve Bank of New Zealand hosted a conference on housing, household debt and policy. 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.
Submissions of theoretical and empirical papers that explore the dynamics of housing markets and household debt; the implications of housing cycles for the macro economy; and the consequences of those dynamics for monetary and macropudential policy were invited. Questions of interest may 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?
Christopher Carroll (Johns Hopkins University)
Greg Kaplan (University of Chicago)
Dirk Krueger (University of Pennsylvania)
Programme of the conference
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 Otago
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 currently unavailable
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