Real Estate Price Inflation, Monetary Policy, and Expectations in the United States and Japan
Real Estate Price Inflation, Monetary Policy, and Expectations in the United States and Japan

Author: Mr.Garry J. Schinasi

Publisher: International Monetary Fund

Published: 1994-01-01

Total Pages: 50

ISBN-13: 1451925557

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During the mid- to late 1980s, inflationary pressures were highly concentrated in asset markets in many industrial countries. This paper discusses why this may have occurred and then develops a forward-looking supply and demand model of the real estate market in which equilibrium prices depend on price expectations, monetary conditions, income, returns to alternative assets, and construction costs. In this model, the current equilibrium price is determined by expectations formed in different time periods by consumers and producers. The model and its more generalized dynamic specifications are estimated by maximum-likelihood methods. The empirical results do not reject the view that the relationship between real estate values and monetary policy was altered in 1980s.

Real Estate Price Inflation, Monetary Policy, and Expectations in the United States and Japan
Real Estate Price Inflation, Monetary Policy, and Expectations in the United States and Japan

Author: Hossein Samiei

Publisher:

Published: 2006

Total Pages: 50

ISBN-13:

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During the mid- to late 1980s, inflationary pressures were highly concentrated in asset markets in many industrial countries. This paper discusses why this may have occurred and then develops a forward-looking supply and demand model of the real estate market in which equilibrium prices depend on price expectations, monetary conditions, income, returns to alternative assets, and construction costs. In this model, the current equilibrium price is determined by expectations formed in different time periods by consumers and producers. The model and its more generalized dynamic specifications are estimated by maximum-likelihood methods. The empirical results do not reject the view that the relationship between real estate values and monetary policy was altered in 1980s.

Working Paper Summaries (WP/94/1 - WP/94/76)
Working Paper Summaries (WP/94/1 - WP/94/76)

Author: International Monetary Fund

Publisher: International Monetary Fund

Published: 1994-08-01

Total Pages: 86

ISBN-13: 1451850956

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The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and national and international economic developments.

Saving Behavior and the Asset Price "Bubble" in Japan
Saving Behavior and the Asset Price

Author: Mr.Ulrich Baumgartner

Publisher: International Monetary Fund

Published: 1995-04-21

Total Pages: 94

ISBN-13: 9781557754622

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This volume brings together various analytical studies the IMF staff has undertaken on the Japanese economy, focusing on two areas of particular interest for both longer-term economic performance and recent cyclical developments. The first is Japan's saving behavior, the second is the remarkable swing in asset prices that occurred in the late 1980s and early 1990s.

IMF Staff papers
IMF Staff papers

Author: International Monetary Fund. Research Dept.

Publisher: International Monetary Fund

Published: 1995-01-01

Total Pages: 244

ISBN-13: 1451957068

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This paper provides a critical survey of the literature on politico-institutional determinants of the government budget. We organize our discussion around two questions: Why did certain OECD countries, but not others, accumulate large public debts? Why did these fiscal imbalances appear in the last twenty years rather than sooner? We begin by discussing the “tax smoothing” model and conclude that this approach alone cannot provide complete answers to these questions. We then proceed to a discussion of political economy models, which we organize into six groups: (1) models based upon opportunistic policy makers and naive voters with “fiscal illusion”; (2) models of intergenerational redistributions; (3) models of debt as a strategic variable, linking the current government with the next one; (4) models of coalition governments; (5) models of geographically dispersed interests; and (6) models emphasizing the effects of budgetary institutions. We conclude by briefly discussing policy implications.

The Yo-Yo Yen
The Yo-Yo Yen

Author: B. Brown

Publisher: Springer

Published: 2002-05-01

Total Pages: 296

ISBN-13: 1403907102

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The violent fluctuations of the Japanese yen through the 1980s and 1990s have played a critical role in Japan's economic decline. Brendan Brown highlights the causes of the yen's bizzare behaviour, and analyses the consequences for the Japanese and global economies. Through this analysis he presents an original hypothesis, linking the periodic sharp upswings of the Yen to poor economic performance and offers a new view as to where the responsibility for failure of the Japanese currency market to function normally lies.

Price Expectations and the U.S. Housing Boom
Price Expectations and the U.S. Housing Boom

Author: Pascal Towbin

Publisher: International Monetary Fund

Published: 2015-07-30

Total Pages: 35

ISBN-13: 1513596233

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Between 1996 and 2006 the U.S. has experienced an unprecedented boom in house prices. As it has proven to be difficult to explain the large price increase by observable fundamentals, many observers have emphasized the role of speculation, i.e. expectations about future price developments. The argument is, however, often indirect: speculation is treated as a deviation from a benchmark. The present paper aims to identify house price expectation shocks directly. To that purpose, we estimate a VAR model for the U.S. and use sign restrictions to identify house price expectation, housing supply, housing demand, and mortgage rate shocks. House price expectation shocks are the most important driver of the boom and account for about 30 percent of the real house price increase. We also construct a model-based measure of exogenous changes in price expectations and show that this measure leads a survey-based measure of changes in house price expectations. Our main identification scheme leaves open whether expectation shifts are realistic or unrealistic. In extensions, we provide evidence that price expectation shifts during the boom were primarily unrealistic and were only marginally affected by realistic expectations about future fundamentals.

Japanese Monetary Policy
Japanese Monetary Policy

Author: Kenneth J. Singleton

Publisher: University of Chicago Press

Published: 2007-12-01

Total Pages: 208

ISBN-13: 0226760685

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How has the Bank of Japan (BOJ) helped shape Japan's economic growth during the past two decades? This book comprehensively explores the relations between financial market liberalization and BOJ policies and examines the ways in which these policies promoted economic growth in the 1980s. The authors argue that the structure of Japan's financial markets, particularly restrictions on money-market transactions and the key role of commercial banks in financing corporate investments, allowed the BOJ to influence Japan's economic success. The first two chapters provide the most in-depth English-language discussion of the BOJ's operating procedures and policymaker's views about how BOJ actions affect the Japanese business cycle. Chapter three explores the impact of the BOJ's distinctive window guidance policy on corporate investment, while chapter four looks at how monetary policy affects the term structure of interest rates in Japan. The final two chapters examine the overall effect of monetary policy on real aggregate economic activity. This volume will prove invaluable not only to economists interested in the technical operating procedures of the BOJ, but also to those interested in the Japanese economy and in the operation and outcome of monetary reform in general.

An Open Economy Macroeconomics Reader
An Open Economy Macroeconomics Reader

Author: Mehmet Ugur

Publisher: Psychology Press

Published: 2002

Total Pages: 572

ISBN-13: 9780415253321

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This book draws together the seminal contributions to the literature on the nature of macroeconomics in open economies and illuminates the material. This is an essential guide to the subject for students.

Frameworks for Monetary Stability
Frameworks for Monetary Stability

Author: Mr.Carlo Cottarelli

Publisher: International Monetary Fund

Published: 1994-12-15

Total Pages: 772

ISBN-13: 9781557754196

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This book, edited by Tomás J.T. Baliño and Carlo Cottarelli, addresses some of the strategic issues faced by policymakers in the choice of a monetary regime. Following an overview of some of these issues, the book considers the various theoretical or practical frameworks for the implementation of monetary policy. It then focuses on how monetary policy should be implemented.