Do Loan-to-Value and Debt-to-Income Limits Work? Evidence from Korea
Author/Editor: Deniz Igan, Heedon Kang
Release Date: © December, 2011
ISBN
: 978-1-46392-783-7
Stock #: WPIEA2011297
English
Stock Status: On back-order
Languages and formats available
| English | French | Spanish | Arabic | Russian | Chinese | Portuguese | |
| Paperback | Yes |
Description
With another real estate boom-bust bringing woes to the world economy, a quest for a better policy toolkit to deal with these boom-busts has begun. Macroprudential measures could be in such a toolkit. Yet, we know very little about their impact. This paper takes a step to fill this gap by analyzing the Korean experience with these measures. We find that loan-to-value and debt-to-income limits are associated with a decline in house price appreciation and transaction activity. Furthermore, the limits alter expectations, which play a key role in bubble dynamics.
Taxonomy
Banks and banking , Business cycles , Economic development , Financial institutions and markets , Loans
More publications in this series: Working Papers
More publications by: Deniz Igan ; Heedon Kang
