Owner-Occupied Housing, Inflation, and Monetary Policy

Published version
Repository DOI

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Authors
Hill, RJ 
Steurer, M 
Waltl, SR 
Abstract

jats:titleAbstract</jats:title>jats:pOwner‐occupied housing (OOH) is currently excluded from the harmonized index of consumer prices (HICP) in Europe. Using microlevel data for Sydney and aggregated data for the United States, France, and Germany, we compare the impact of alternative treatments of OOH on measured inflation. We recommend including OOH in the HICP using a simplified version of the user‐cost method. This would improve the harmonization of the HICP, help close the credibility gap between measured inflation and public perceptions of it, and allow the ECB to lean against a housing boom without departing from its inflation target.</jats:p>

Description
Keywords
measurement of inflation, owner-occupied housing, user cost, rental equivalence, hedonic quantile regression, housing booms and busts, inflation targeting, leaning against the wind
Journal Title
Journal of Money, Credit and Banking
Conference Name
Journal ISSN
0022-2879
1538-4616
Volume Title
Publisher
Wiley