Graph with houses

April 27, 2009

Richmond Fed's Economic Quarterly Explores the Housing Market

Problems for a Fundamental Theory of House Prices by Andreas Hornstein

Many people presume that financial innovations over the last 30 years that have made it easier for households to borrow against the collateral value of their homes have increased the demand for housing and, as a result, house prices. But in the latest issue of the Federal Reserve Bank of Richmond’s Economic Quarterly, Richmond Fed economist Andreas Hornstein argues that changes in collateral constraints have not significantly affected aggregate house prices.  Instead, rates of house appreciation are likely to be determined by the basic supply and demand structure of the housing market.

You can find the full text of this article and others in the latest issue of Economic Quarterly.

Also in the Winter 2009 issue:

  • Indeterminacy from Inflation Forecast Targeting by Bennett T. McCallum
  • Semiparametric Estimation of Land Price Gradients Using Large Data Sets by Kevin A. Bryan and Pierre-Daniel G. Sarte
  • Consumption Smoothing and the Measured Regressivity of Consumption Taxes by Kartik B. Athreya and Devin Reilly

The Economic Quarterly is a free publication containing economic analysis pertinent to Federal Reserve monetary and banking policy. For free copies or more information, contact the Federal Reserve Bank of Richmond’s Public Affairs office at (804) 697-7982.

The Richmond Fed serves the Fifth Federal Reserve District, which includes the District of Columbia, Maryland, North Carolina, South Carolina, Virginia and most of West Virginia. As part of the nation's central bank, we're one of 12 regional Reserve Banks that work together with the Federal Reserve's Board of Governors to strengthen the economy and our communities. We manage the nation's money supply to keep inflation low and help the economy grow. We also supervise and regulate financial institutions to help safeguard our nation's financial system and protect the integrity and efficiency of our payments system.


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