Housing, Finance, Policy and the Economy

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Date Published September 2016
Primary Author Sabine Winkler
Other Authors
Theme Real Estate Cycles and Bubbles


Building an understanding of the interrelations of housing, finance, policy and the economy is a critical step towards developing a strategy that permits policy makers to leverage resources and enable the housing market to function better in the pursuit of economic, financial, social and environmental objectives. The wealth effect and the financial accelerator are two of the aspects that connect housing and the economy. Powerful real, legislative and financial circuits suggest that an enabling strategy for housing can support societal progress and wellbeing. By drawing on the existing literature in this area, this study examines the rational for housing market regulation, investigates whether housing market corrects threaten macroeconomic stability, and asks whether policies are efficacious at controlling housing market outcomes. This study adds to the debate on how to optimize the housing-related policy toolbox by presenting critical concepts and shedding light on the interplay between housing and the economy.

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