TY - BOOK ID - 84783714 TI - Housing Price and Household Debt Interactions in Sweden PY - 2015 SN - 1513562460 1513567160 1513528971 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Banks and Banking KW - Infrastructure KW - Macroeconomics KW - Real Estate KW - Industries: Financial Services KW - Macroeconomics: Consumption KW - Saving KW - Wealth KW - Demand for Money KW - Money Supply KW - Credit KW - Money Multipliers KW - Urban, Rural, and Regional Economics: Housing Demand KW - Housing Supply and Markets KW - Economic Development: Urban, Rural, Regional, and Transportation Analysis KW - Housing KW - Banks KW - Depository Institutions KW - Micro Finance Institutions KW - Mortgages KW - Personal Income, Wealth, and Their Distributions KW - Interest Rates: Determination, Term Structure, and Effects KW - Property & real estate KW - Finance KW - Housing prices KW - Disposable income KW - Real interest rates KW - Prices KW - National accounts KW - Financial institutions KW - Financial services KW - Saving and investment KW - National income KW - Interest rates KW - Sweden UR - https://www.unicat.be/uniCat?func=search&query=sysid:84783714 AB - Sweden is experiencing double-digit housing price gains alongside rising household debt. A common interpretation is that mortgage lending boosted by expansionary monetary policy is driving up house prices. But theory suggests the value of housing collateral is also important for household’s capacity to borrow. This paper examines the interactions between housing prices and household debt using a three-equation model, finding that household borrowing impacts housing prices in the short-run, but the price of housing is the main driver of the secular trend in household debt over the long-run. Both housing prices and household debt are estimated to be moderately above their long-run equilibrium levels, but the adjustment toward equilibrium is not found to be rapid. Whereas low interest rates have contributed to the recent surge in housing prices, growth in incomes and financial assets play a larger role. Policy experiments suggest that a gradual phasing out of mortgage interest deductibility is likely to have a manageable effect on housing prices and household debt. ER -