Monetary Policy and the Real Estate Market: Theoretical Framework and Empirical Evidence

Emil Birger(Department of Economics, Helmut Schmidt University, University FAF Hamburg, Holstenhofweg 85, 22043 Hamburg, Germany)
Mohamed Hussain(Department of Economics, Helmut Schmidt University, University FAF Hamburg, Holstenhofweg 85, 22043 Hamburg, Germany)

Abstract

This paper aims to explore the intricate relationship between monetary policy and the real estate market, focusing on the theoretical frameworks and empirical evidence that underlie this connection. Starting from a theoretical perspective, we analyze how changes in monetary policy, such as interest rates and money supply, can influence the real estate market dynamics, including property prices, investment, and consumer demand. Furthermore, we review relevant empirical studies that provide evidence on the effectiveness of monetary policy in regulating the real estate sector and its impact on economic outcomes. This paper also highlights the challenges and limitations in existing research, offering directions for future research to enhance our understanding of this complex relationship.

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DOI: http://dx.doi.org/10.26549/jesr.v6i2.15946