Christiane Kneer and Alexander Raabe

Stephen Burgess and Rachana Shanbhogue

Almog Adir and Simon Whitaker

Glenn Hoggarth, Carsten Jung and Dennis Reinhardt.

In some parts of the emerging world, housing markets have grown well ahead of income in recent years.  Will a US monetary policy normalisation bring about a correction in house prices as the search for yield unwinds and capital flows back to the US?  Looking at the past through the prism of a structural VAR, we think the answer is “yes it will”.  Shocks to global liquidity have much larger effects on house prices in emerging markets than in advanced world economies.