Owner-Occupied Housing, Inflation, and Monetary Policy

Robert J. Hill; Miriam Steurer; Sofie R. Waltl

doi:10.1111/jmcb.13059

Owner-Occupied Housing, Inflation, and Monetary Policy

Robert J. Hill, Miriam Steurer, Sofie R. Waltl

Urban Development & Mobility

Research output: Contribution to journal › Article › peer-review

Abstract

Owner-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.

Original language	English
Journal	Journal of Money, Credit and Banking
DOIs	https://doi.org/10.1111/jmcb.13059
Publication status	E-pub ahead of print - 13 May 2023

Bibliographical note

Publisher Copyright:
© 2023 The Authors. Journal of Money, Credit and Banking published by Wiley Periodicals LLC on behalf of Ohio State University.

Keywords

measurement of inflation
owner-occupied housing
user cost
rental equivalence
hedonic quantile regression
housing booms and busts
inflation targeting
leaning against the wind

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10.1111/jmcb.13059

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Owner-Occupied Housing, Inflation, and Monetary Policy

Abstract

Bibliographical note

Keywords

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