Work detail

The Effects of Monetary Policy on Housing Prices: Evidence from the Czech Republic

Author: Mgr. Jan Michalec
Year: 2019 - winter
Leaders: doc. PhDr. Tomáš Havránek Ph.D.
Work type: Finance, Financial Markets and Banking
Language: English
Pages: 91
Awards and prizes:
Abstract: This thesis explores the relationship between interest rates, house prices and main
macroeconomic variables. In particular, I examine how monetary policy affects house prices in
the Czech Republic. The hypotheses assume that an increase in the interest rate that tends to
decrease house prices also reduces output and inflation simultaneously. Therefore, the latter
would imply that the monetary authority faces a trade-off between macroeconomic and
financial stability. The empirical analysis is based on a vector autoregression model and the
monetary policy shock is retrieved by the Cholesky decomposition. As for the results, the
findings of the thesis conclude that there is a costly trade-off between macroeconomic and
financial stability within the Czech economy




Patria Finance