99 Luftballons Monetary Policy and the House Price Boom Across U . S . States

  title={99 Luftballons Monetary Policy and the House Price Boom Across U . S . States},
  author={Marco Negro and Christopher Otrok},
We use a dynamic factor model estimated via Bayesian methods to disentangle the relative importance of the common component in OFHEO house price movements from stateor region-specific shocks, estimated on quarterly state-level data from 1986 to 2005. We find that historically movements in house prices have mainly been driven by the local (stateor region-specific) component. The recent period (2001-2005) has been different, however: “Local bubbles” have been important in some states, but overall… CONTINUE READING
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