Monetary Policy and Housing Prices Dynamics in India
This study attempts to examine the relationship between monetary policy and housing prices in India. We use monthly data from January 2009 to December 2018 of four variables- Housing Price Index (HPI), Real Effective Exchange Rate (REER), Gross Domestic Price (GDP), and interest rate for our esti...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
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Ala-Too International University
2021-05-01
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| Series: | Eurasian Journal of Business and Economics |
| Subjects: | |
| Online Access: | https://ejbe.org/EJBE2021Vol14No27p047-NAIKOO-PEER-AHMED-ISHTIAQ.pdf |
| _version_ | 1831659715870851072 |
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| author | M. Waseem NAIKOO Arshid H. PEER Farhan AHMED M. ISHTIAQ |
| author_facet | M. Waseem NAIKOO Arshid H. PEER Farhan AHMED M. ISHTIAQ |
| author_sort | M. Waseem NAIKOO |
| collection | DOAJ |
| description | This study attempts to examine the relationship between monetary policy and
housing prices in India. We use monthly data from January 2009 to December 2018
of four variables- Housing Price Index (HPI), Real Effective Exchange Rate (REER),
Gross Domestic Price (GDP), and interest rate for our estimations using the
Autoregressive Distributive Lag (ARDL) Model. The results from the study show that
the impact of monetary policy on housing prices is significant only on lag three;
however, the coefficient is very small. The results from the ARDL model are also
supported by the variance decomposition of housing price. The variance
decomposition of housing prices highlights that monetary policy explains around 13
percent of the variation in housing prices over a period of ten months. Further, the
accumulated impulse response function reveals that with one-unit shock to interest
rate results in a -0.000875 unit change in housing price. The study stipulates that,
since conventional monetary policy has a modest impact on housing prices, therefore, it is insignificant for addressing the problems of real estate in India. |
| first_indexed | 2024-12-19T18:03:25Z |
| format | Article |
| id | doaj.art-852af9a258ce47a39d8a13fe235a1c89 |
| institution | Directory Open Access Journal |
| issn | 1694-5948 1694-5948 |
| language | English |
| last_indexed | 2024-12-19T18:03:25Z |
| publishDate | 2021-05-01 |
| publisher | Ala-Too International University |
| record_format | Article |
| series | Eurasian Journal of Business and Economics |
| spelling | doaj.art-852af9a258ce47a39d8a13fe235a1c892022-12-21T20:11:32ZengAla-Too International UniversityEurasian Journal of Business and Economics1694-59481694-59482021-05-01142711510.17015/ejbe.2021.027.03Monetary Policy and Housing Prices Dynamics in IndiaM. Waseem NAIKOO0Arshid H. PEER1Farhan AHMED2M. ISHTIAQ3Jamia Millia Islamia (A Central University)Jamia Millia Islamia (A Central University)Aligarh Muslim UniversityJamia Millia Islamia (A Central University)This study attempts to examine the relationship between monetary policy and housing prices in India. We use monthly data from January 2009 to December 2018 of four variables- Housing Price Index (HPI), Real Effective Exchange Rate (REER), Gross Domestic Price (GDP), and interest rate for our estimations using the Autoregressive Distributive Lag (ARDL) Model. The results from the study show that the impact of monetary policy on housing prices is significant only on lag three; however, the coefficient is very small. The results from the ARDL model are also supported by the variance decomposition of housing price. The variance decomposition of housing prices highlights that monetary policy explains around 13 percent of the variation in housing prices over a period of ten months. Further, the accumulated impulse response function reveals that with one-unit shock to interest rate results in a -0.000875 unit change in housing price. The study stipulates that, since conventional monetary policy has a modest impact on housing prices, therefore, it is insignificant for addressing the problems of real estate in India.https://ejbe.org/EJBE2021Vol14No27p047-NAIKOO-PEER-AHMED-ISHTIAQ.pdfmonetary policyinterest ratehousing priceardl |
| spellingShingle | M. Waseem NAIKOO Arshid H. PEER Farhan AHMED M. ISHTIAQ Monetary Policy and Housing Prices Dynamics in India Eurasian Journal of Business and Economics monetary policy interest rate housing price ardl |
| title | Monetary Policy and Housing Prices Dynamics in India |
| title_full | Monetary Policy and Housing Prices Dynamics in India |
| title_fullStr | Monetary Policy and Housing Prices Dynamics in India |
| title_full_unstemmed | Monetary Policy and Housing Prices Dynamics in India |
| title_short | Monetary Policy and Housing Prices Dynamics in India |
| title_sort | monetary policy and housing prices dynamics in india |
| topic | monetary policy interest rate housing price ardl |
| url | https://ejbe.org/EJBE2021Vol14No27p047-NAIKOO-PEER-AHMED-ISHTIAQ.pdf |
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