Owner Occupied Housing, Inflation and Monetary Policy

Robert J. Hill; Miriam Steurer; Sofie Waltl

Owner Occupied Housing, Inflation and Monetary Policy

Robert J. Hill
, Miriam Steurer
, Sofie Waltl

Urban Development & Mobility

Research output: Working paper

Abstract

The ECB and Eurostat have been trying to bring owner-occupied housing (OOH) into the Harmonized Index of Consumer Prices (HICP) for two decades without success. OOH is now back on the agenda as part of the ECB’s new monetary-policy strategy. A fresh perspective is needed. We argue that a viable way forward is 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 the public’s perception of it, and make it easier for the ECB to achieve its inflation target.

Original language	English
Publisher	University of Graz
Publication status	Published - Oct 2020

Publication series

Name	Graz Economics Papers
Volume	2020-18

Keywords

Measurement of inflation
Owner occupied housing
User cost
Rental equivalence
Hedonic quantile regression
Housing booms and busts
Inflation targeting
Disinflation puzzle

Access to Document

https://ideas.repec.org/p/grz/wpaper/2020-18.html

Owner Occupied Housing in the CPI and Its Impact On Monetary Policy During Housing Booms and Busts
Hill, R. J., Steurer, M. & Waltl, S. R., Feb 2018, LISER, 72 p. (Working Papers; no. 2018-05).
Research output: Working paper

Open Access
File

Cite this

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abstract = "The ECB and Eurostat have been trying to bring owner-occupied housing (OOH) into the Harmonized Index of Consumer Prices (HICP) for two decades without success. OOH is now back on the agenda as part of the ECB{\textquoteright}s new monetary-policy strategy. A fresh perspective is needed. We argue that a viable way forward is 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 the public{\textquoteright}s perception of it, and make it easier for the ECB to achieve its inflation target.",

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AB - The ECB and Eurostat have been trying to bring owner-occupied housing (OOH) into the Harmonized Index of Consumer Prices (HICP) for two decades without success. OOH is now back on the agenda as part of the ECB’s new monetary-policy strategy. A fresh perspective is needed. We argue that a viable way forward is 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 the public’s perception of it, and make it easier for the ECB to achieve its inflation target.

KW - Measurement of inflation

KW - Owner occupied housing

KW - User cost

KW - Rental equivalence

KW - Hedonic quantile regression

KW - Housing booms and busts

KW - Inflation targeting

KW - Disinflation puzzle

M3 - Working paper

T3 - Graz Economics Papers

BT - Owner Occupied Housing, Inflation and Monetary Policy

PB - University of Graz

ER -

Owner Occupied Housing, Inflation and Monetary Policy

Abstract

Publication series

Keywords

Access to Document

Research output

Owner Occupied Housing in the CPI and Its Impact On Monetary Policy During Housing Booms and Busts

Cite this