Author: Andrea ZehnderPublisher:
ISBN:
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Languages : en
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Book Description
This thesis investigates in how far monetary policy decisions by the Board of Governors of the Federal Reserve influence the housing market in the United States. On the basis of three different home value tiers, it is studied in how far the sensitivities to changes in the level of the interest rate vary between the segment and what this implies for the income and wealth distribution among households. By estimating linear and spatial panel data models, evidence is found for substantial differences in the elasticities of the three home value tiers. While the top tier proves quite resilient, the bottom home value is disproportionally strong affected by changes in the interest rate level. These results are robust across different model specifications. Transferring the findings to the context of income segments, it is concluded that the monetary policy regime of the recent two decades, through the transmission channel on home values, has increased the income and wealth disparity among home owners.
