Pub Date : 2026-03-01Epub Date: 2026-02-13DOI: 10.1016/j.cbrev.2026.100245
Elyor Davlatov , Judit Sági
This study aims to evaluate the transmission mechanisms of monetary policy in a post-communist economy using structural vector autoregression (SVAR) model. We constructed two SVAR models employing both recursive and non-recursive approaches to identify monetary policy shocks and analyze how other variables in the system respond to these shocks. The findings of the study are as follows: First, the recursively identified structure produced price and exchange rate puzzles, where output and inflation reacted to unexpected monetary policy shocks in a manner inconsistent with theoretical expectations. Second, a non-recursive structure under zero contemporaneous restrictions was applied to address the anomalies found with the recursive scheme. The non-recursive model generated outcomes that resolved both the price and exchange rate puzzles. Third, the exchange rate is more responsive to monetary policy disturbances than interest rates in the non-recursive model, as reflected by impulse response functions (IRFs), leading us to conclude that the exchange rate channel operates more effectively than the interest rate channel in Uzbekistan.
{"title":"Monetary policy transmission mechanism in post-communist economies: Evidence from Uzbekistan","authors":"Elyor Davlatov , Judit Sági","doi":"10.1016/j.cbrev.2026.100245","DOIUrl":"10.1016/j.cbrev.2026.100245","url":null,"abstract":"<div><div>This study aims to evaluate the transmission mechanisms of monetary policy in a post-communist economy using structural vector autoregression (SVAR) model. We constructed two SVAR models employing both recursive and non-recursive approaches to identify monetary policy shocks and analyze how other variables in the system respond to these shocks. The findings of the study are as follows: First, the recursively identified structure produced price and exchange rate puzzles, where output and inflation reacted to unexpected monetary policy shocks in a manner inconsistent with theoretical expectations. Second, a non-recursive structure under zero contemporaneous restrictions was applied to address the anomalies found with the recursive scheme. The non-recursive model generated outcomes that resolved both the price and exchange rate puzzles. Third, the exchange rate is more responsive to monetary policy disturbances than interest rates in the non-recursive model, as reflected by impulse response functions (IRFs), leading us to conclude that the exchange rate channel operates more effectively than the interest rate channel in Uzbekistan.</div></div>","PeriodicalId":43998,"journal":{"name":"Central Bank Review","volume":"26 1","pages":"Article 100245"},"PeriodicalIF":1.2,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146193298","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-03-01Epub Date: 2026-02-18DOI: 10.1016/j.cbrev.2026.100243
Ozan Bakış
This paper calculates the contribution of the reallocation of capital and labor to aggregate TFP for the 2000–2024 period in the Turkish economy. While the reallocation effect is generally positive for labor (except for crisis years), there are two separate periods for capital. In the period 2000–2014, the reallocation effect for capital is positive, while in the period 2015–2024 it became consistently negative. The paper also takes into account improvements in schooling over time while calculating sectoral TFP growth. Leaving aside the crisis periods of 2000–2002 and 2008–2010, I find that the TFP growth is positive in the 2003–2007 and 2011–2014 periods. However, aggregate TFP growth is almost zero in the 2015–2024 period where there is no economic crisis. TFP growth is very volatile and low on average in the construction sector. The services sector is characterized by negative TFP growth. Agriculture has the smoothest trends and the highest average TFP growth.
{"title":"The effects of capital and labor reallocation on total factor productivity in Türkiye, 2000–2024","authors":"Ozan Bakış","doi":"10.1016/j.cbrev.2026.100243","DOIUrl":"10.1016/j.cbrev.2026.100243","url":null,"abstract":"<div><div>This paper calculates the contribution of the reallocation of capital and labor to aggregate TFP for the 2000–2024 period in the Turkish economy. While the reallocation effect is generally positive for labor (except for crisis years), there are two separate periods for capital. In the period 2000–2014, the reallocation effect for capital is positive, while in the period 2015–2024 it became consistently negative. The paper also takes into account improvements in schooling over time while calculating sectoral TFP growth. Leaving aside the crisis periods of 2000–2002 and 2008–2010, I find that the TFP growth is positive in the 2003–2007 and 2011–2014 periods. However, aggregate TFP growth is almost zero in the 2015–2024 period where there is no economic crisis. TFP growth is very volatile and low on average in the construction sector. The services sector is characterized by negative TFP growth. Agriculture has the smoothest trends and the highest average TFP growth.</div></div>","PeriodicalId":43998,"journal":{"name":"Central Bank Review","volume":"26 1","pages":"Article 100243"},"PeriodicalIF":1.2,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"147405867","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-03-01Epub Date: 2026-02-18DOI: 10.1016/j.cbrev.2026.100244
Kadir Gürci̇ , Seyid Fahri Mahmud
The impact of public status on the performance of non-financial Turkish firms during the COVID-19 pandemic is analyzed using a quasi-experimental design that combines propensity score matching (PSM) with difference-in-differences (DiD). Firm performance is evaluated across four dimensions: liquidity, profitability, leverage, and efficiency. The results indicate that public firms outperformed their matched private counterparts during the pandemic. When examined by firm size, public SMEs are observed to have performed significantly better than private SMEs, whereas no statistically significant differences are found between large public and large private firms. Despite extensive government support for all SMEs through stimulus packages and credit facilities, the findings suggest that public status conferred additional advantages that enhanced SME resilience during the crisis. Moreover, the public SMEs were also able to expand their assets, exhibit higher investment ratio and lower default rates. The results remain robust across alternative specifications and falsification tests, reinforcing the credibility of the evidence and underscoring the importance of public equity markets in strengthening firm resilience during systemic shocks.
{"title":"Did public firms manage the COVID-19 better? A quasi-experimental design for non-financial firms in Türkiye","authors":"Kadir Gürci̇ , Seyid Fahri Mahmud","doi":"10.1016/j.cbrev.2026.100244","DOIUrl":"10.1016/j.cbrev.2026.100244","url":null,"abstract":"<div><div>The impact of public status on the performance of non-financial Turkish firms during the COVID-19 pandemic is analyzed using a quasi-experimental design that combines propensity score matching (PSM) with difference-in-differences (DiD). Firm performance is evaluated across four dimensions: liquidity, profitability, leverage, and efficiency. The results indicate that public firms outperformed their matched private counterparts during the pandemic. When examined by firm size, public SMEs are observed to have performed significantly better than private SMEs, whereas no statistically significant differences are found between large public and large private firms. Despite extensive government support for all SMEs through stimulus packages and credit facilities, the findings suggest that public status conferred additional advantages that enhanced SME resilience during the crisis. Moreover, the public SMEs were also able to expand their assets, exhibit higher investment ratio and lower default rates. The results remain robust across alternative specifications and falsification tests, reinforcing the credibility of the evidence and underscoring the importance of public equity markets in strengthening firm resilience during systemic shocks.</div></div>","PeriodicalId":43998,"journal":{"name":"Central Bank Review","volume":"26 1","pages":"Article 100244"},"PeriodicalIF":1.2,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"147405868","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-03-01Epub Date: 2026-02-14DOI: 10.1016/j.cbrev.2026.100242
Žaneta Vodrážka
The article estimates the effectiveness of tightening borrower-, capital-, and liquidity-based tools in decreasing the cyclical component of housing price growth and the probability of housing price booms with and without a low interest rate environment. The estimate is based on quarterly data for 41 countries from 2000 Q1 to 2021 Q4. We use the local projections approach to estimate a linear panel model and a logit model. The results highlight the critical role of a low interest rate environment in the design of macroprudential policy tools. In a low interest rate environment, tightening of borrower-based tools raises the probability of housing price booms over the period studied. However, in the absence of a low interest rate environment, borrower-based tools are more effective for decreasing the probability of housing price booms than other tools. Tightening of capital-based tools is moderately effective in lowering the probability of housing price booms in the absence of low interest rates, but in a low interest rate environment, it increases the probability of housing price booms in the first year of the horizon. Lastly, tightening of liquidity-based tools does not have a significant effect on the probability of housing price booms, regardless of interest rates.
{"title":"The effectiveness of macroprudential policy tools in reducing the likelihood of housing price booms: The role of a low interest rate environment","authors":"Žaneta Vodrážka","doi":"10.1016/j.cbrev.2026.100242","DOIUrl":"10.1016/j.cbrev.2026.100242","url":null,"abstract":"<div><div>The article estimates the effectiveness of tightening borrower-, capital-, and liquidity-based tools in decreasing the cyclical component of housing price growth and the probability of housing price booms with and without a low interest rate environment. The estimate is based on quarterly data for 41 countries from 2000 Q1 to 2021 Q4. We use the local projections approach to estimate a linear panel model and a logit model. The results highlight the critical role of a low interest rate environment in the design of macroprudential policy tools. In a low interest rate environment, tightening of borrower-based tools raises the probability of housing price booms over the period studied. However, in the absence of a low interest rate environment, borrower-based tools are more effective for decreasing the probability of housing price booms than other tools. Tightening of capital-based tools is moderately effective in lowering the probability of housing price booms in the absence of low interest rates, but in a low interest rate environment, it increases the probability of housing price booms in the first year of the horizon. Lastly, tightening of liquidity-based tools does not have a significant effect on the probability of housing price booms, regardless of interest rates.</div></div>","PeriodicalId":43998,"journal":{"name":"Central Bank Review","volume":"26 1","pages":"Article 100242"},"PeriodicalIF":1.2,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"147405866","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-03-01Epub Date: 2026-02-14DOI: 10.1016/j.cbrev.2026.100241
Mehmet Aydin , Ahmet Bagci , Nazli Demirtas , Yasin Sogut , Mehmet Emin Altundemir , Temel Gürdal
Economic complexity is an indicator that measures the diversity and sophistication of the production structure of a country's economy. This concept is an important tool for economic development and international competitiveness. This study investigates the long-run effects of digitalization, industrialization, financial freedom, and institutional quality on economic complexity within the E−7 countries (Brazil, China, India, Indonesia, Mexico, Russia, and Türkiye) from 1995 to 2021. Employing panel cointegration analysis through the Durbin-Hausman approach and long-run estimation via the Augmented Mean Group estimator, the study accounts for cross-sectional dependence and slope heterogeneity. The results reveal heterogeneous dynamics across countries: Digitalization increases complexity in China and Türkiye while reducing it in Brazil, Indonesia, and Russia. Industrialization positively contributes to complexity in Brazil and Türkiye, whereas financial freedom exhibits positive effects in Indonesia, Mexico, and Russia but negative in China and India. Institutional quality reduces economic complexity in Brazil and Mexico, but increases it in Turkey. These findings highlight the context-dependent nature of structural transformation and underscore the importance of aligning national digital, industrial, and financial strategies with institutional reforms. The study contributes to the literature by offering a multidimensional empirical assessment of complexity determinants within an emerging economy context. As a policy recommendation, targeted reforms that strengthen institutional governance and enable productive digital and industrial ecosystems are essential to unlocking complexity-driven development in E−7 economies.
{"title":"The relationship of digitalization, industrialization, financial freedom and institutional quality with economic complexity: A panel data analysis on E−7 countries","authors":"Mehmet Aydin , Ahmet Bagci , Nazli Demirtas , Yasin Sogut , Mehmet Emin Altundemir , Temel Gürdal","doi":"10.1016/j.cbrev.2026.100241","DOIUrl":"10.1016/j.cbrev.2026.100241","url":null,"abstract":"<div><div>Economic complexity is an indicator that measures the diversity and sophistication of the production structure of a country's economy. This concept is an important tool for economic development and international competitiveness. This study investigates the long-run effects of digitalization, industrialization, financial freedom, and institutional quality on economic complexity within the E−7 countries (Brazil, China, India, Indonesia, Mexico, Russia, and Türkiye) from 1995 to 2021. Employing panel cointegration analysis through the Durbin-Hausman approach and long-run estimation via the Augmented Mean Group estimator, the study accounts for cross-sectional dependence and slope heterogeneity. The results reveal heterogeneous dynamics across countries: Digitalization increases complexity in China and Türkiye while reducing it in Brazil, Indonesia, and Russia. Industrialization positively contributes to complexity in Brazil and Türkiye, whereas financial freedom exhibits positive effects in Indonesia, Mexico, and Russia but negative in China and India. Institutional quality reduces economic complexity in Brazil and Mexico, but increases it in Turkey. These findings highlight the context-dependent nature of structural transformation and underscore the importance of aligning national digital, industrial, and financial strategies with institutional reforms. The study contributes to the literature by offering a multidimensional empirical assessment of complexity determinants within an emerging economy context. As a policy recommendation, targeted reforms that strengthen institutional governance and enable productive digital and industrial ecosystems are essential to unlocking complexity-driven development in E−7 economies.</div></div>","PeriodicalId":43998,"journal":{"name":"Central Bank Review","volume":"26 1","pages":"Article 100241"},"PeriodicalIF":1.2,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"147405864","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-01Epub Date: 2025-10-14DOI: 10.1016/j.cbrev.2025.100222
Günnur Ege Bilgin
I analyze the mechanism used to assign medical doctors to mandatory service positions in Türkiye. To address staffing gaps in underserved areas, the government requires newly graduated, specialized, or subspecialized doctors to work in designated hospitals. Doctors submit ranked preferences, and the current mechanism is equivalent to the Boston mechanism followed by a general lottery step, but without any priority structure on the hospital side. This lack of hospital preferences turns the assignment into a one-sided matching problem, where only doctors have preferences. Despite high satisfaction reports by the Ministry of Health – claiming most doctors are assigned to one of their top choices – the mechanism has significant drawbacks. Most importantly, the mechanism is not strategy-proof: doctors may benefit from misrepresenting their preferences. For example, some may list less-demanded but acceptable hospitals as top choices to avoid assignment to more undesirable locations. Such strategic behavior distorts the allocation and undermines transparency. Doctors also share strategies in online forums, introducing further inefficiencies. To address these issues, I propose replacing the current mechanism with random serial dictatorship (RSD). RSD is strategy-proof, eliminating incentives for manipulation, and offers a simpler, more transparent process for mandatory service assignments.
{"title":"Assigning doctors to mandatory service hospitals: a strategy-proof approach","authors":"Günnur Ege Bilgin","doi":"10.1016/j.cbrev.2025.100222","DOIUrl":"10.1016/j.cbrev.2025.100222","url":null,"abstract":"<div><div>I analyze the mechanism used to assign medical doctors to mandatory service positions in Türkiye. To address staffing gaps in underserved areas, the government requires newly graduated, specialized, or subspecialized doctors to work in designated hospitals. Doctors submit ranked preferences, and the current mechanism is equivalent to the Boston mechanism followed by a general lottery step, but without any priority structure on the hospital side. This lack of hospital preferences turns the assignment into a one-sided matching problem, where only doctors have preferences. Despite high satisfaction reports by the Ministry of Health – claiming most doctors are assigned to one of their top choices – the mechanism has significant drawbacks. Most importantly, the mechanism is not strategy-proof: doctors may benefit from misrepresenting their preferences. For example, some may list less-demanded but acceptable hospitals as top choices to avoid assignment to more undesirable locations. Such strategic behavior distorts the allocation and undermines transparency. Doctors also share strategies in online forums, introducing further inefficiencies. To address these issues, I propose replacing the current mechanism with random serial dictatorship (RSD). RSD is strategy-proof, eliminating incentives for manipulation, and offers a simpler, more transparent process for mandatory service assignments.</div></div>","PeriodicalId":43998,"journal":{"name":"Central Bank Review","volume":"25 4","pages":"Article 100222"},"PeriodicalIF":1.2,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145326125","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-01Epub Date: 2025-10-01DOI: 10.1016/j.cbrev.2025.100219
Juan-Francisco Albert , Nerea Gómez-Fernández
Utilizing the Realtime Inequality database, this paper employs a Bayesian Proxy SVAR model to examine the distributional effects of monetary policy on various dimensions of income and wealth inequality in the United States. This study introduces a novel approach by utilizing new monthly series to accurately estimate the final effects and transmission channels. The results indicate a U-shaped pattern in the effects of expansionary monetary policy on inequality. In the case of income, both the bottom 50 % and the top 10 % are the main beneficiaries, while the middle 40 % experience a comparatively smaller positive impact. However, regarding wealth, it is the top 10 % who benefit most prominently from expansionary monetary policy. Identified channels, including earnings heterogeneity and income composition, contribute to these findings. This research enhances understanding of monetary policy's nuanced transmission channels, providing timely insights for policymakers.
{"title":"Deciphering the U-shaped impact: High frequency data and monetary policy effects on inequality","authors":"Juan-Francisco Albert , Nerea Gómez-Fernández","doi":"10.1016/j.cbrev.2025.100219","DOIUrl":"10.1016/j.cbrev.2025.100219","url":null,"abstract":"<div><div>Utilizing the Realtime Inequality database, this paper employs a Bayesian Proxy SVAR model to examine the distributional effects of monetary policy on various dimensions of income and wealth inequality in the United States. This study introduces a novel approach by utilizing new monthly series to accurately estimate the final effects and transmission channels. The results indicate a U-shaped pattern in the effects of expansionary monetary policy on inequality. In the case of income, both the bottom 50 % and the top 10 % are the main beneficiaries, while the middle 40 % experience a comparatively smaller positive impact. However, regarding wealth, it is the top 10 % who benefit most prominently from expansionary monetary policy. Identified channels, including earnings heterogeneity and income composition, contribute to these findings. This research enhances understanding of monetary policy's nuanced transmission channels, providing timely insights for policymakers.</div></div>","PeriodicalId":43998,"journal":{"name":"Central Bank Review","volume":"25 4","pages":"Article 100219"},"PeriodicalIF":1.2,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145736724","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper analyzes how unexpected oil supply shocks shape firms’ inflation expectations and real activity using a dataset of Turkish manufacturing firms. At the aggregate level, oil supply shocks significantly increase both actual CPI inflation and firms’ average inflation expectations, with effects persisting for up to 15 months. Our firm-level analysis reveals substantial heterogeneity: smaller and highly leveraged firms respond more strongly to oil shocks, significantly raising their expectations for inflation, own prices, and unit costs compared to larger, financially robust firms. Furthermore, these shocks worsen firms’ business outlook and lead to tangible reductions in capacity utilization. Leveraging administrative firm-to-firm transaction data, we show that oil shocks also reduce firms’ sales, purchases, and the number of trading partners — particularly among financially constrained firms — highlighting real dislocations that propagate through production networks. In contrast, carbon price shocks and global temperature changes have no significant impact, consistent with the absence of a binding carbon pricing mechanism in Türkiye during the study period. Our findings highlight oil supply shocks as a crucial driver of firm-level expectations and real activity, emphasizing the importance of incorporating energy-cost dynamics into inflation-targeting frameworks.
{"title":"How do oil supply and carbon policy affect firms’ expectations and decisions?","authors":"Okan Akarsu , Emrehan Aktug , Huzeyfe Torun , Cihan Yalçın","doi":"10.1016/j.cbrev.2025.100228","DOIUrl":"10.1016/j.cbrev.2025.100228","url":null,"abstract":"<div><div>This paper analyzes how unexpected oil supply shocks shape firms’ inflation expectations and real activity using a dataset of Turkish manufacturing firms. At the aggregate level, oil supply shocks significantly increase both actual CPI inflation and firms’ average inflation expectations, with effects persisting for up to 15 months. Our firm-level analysis reveals substantial heterogeneity: smaller and highly leveraged firms respond more strongly to oil shocks, significantly raising their expectations for inflation, own prices, and unit costs compared to larger, financially robust firms. Furthermore, these shocks worsen firms’ business outlook and lead to tangible reductions in capacity utilization. Leveraging administrative firm-to-firm transaction data, we show that oil shocks also reduce firms’ sales, purchases, and the number of trading partners — particularly among financially constrained firms — highlighting real dislocations that propagate through production networks. In contrast, carbon price shocks and global temperature changes have no significant impact, consistent with the absence of a binding carbon pricing mechanism in Türkiye during the study period. Our findings highlight oil supply shocks as a crucial driver of firm-level expectations and real activity, emphasizing the importance of incorporating energy-cost dynamics into inflation-targeting frameworks.</div></div>","PeriodicalId":43998,"journal":{"name":"Central Bank Review","volume":"25 ","pages":"Article 100228"},"PeriodicalIF":1.2,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145738896","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-01Epub Date: 2025-10-06DOI: 10.1016/j.cbrev.2025.100220
Žaneta Vodrážka
This article examines whether the tightening of macroprudential policy induces a “substitution effect” between owner-occupied and rental housing markets, evidenced by falling housing sales price growth and rising rental price growth. Using a large sample of 39 countries and two different modeling approaches, we produce impulse response functions (IRFs) to show the response of the dependent variables to changes in three groups of macroprudential policy tools: borrower-, capital- and liquidity-based tools. The baseline models use the local projections approach and compare estimates based on data from 2000 Q1 to 2022 Q4 and from 2012 Q1 to 2022 Q4. These baseline estimates are compared to the IRFs estimated by the panel Vector Autoregression model with fixed effects. The results confirm that macroprudential policy tools, especially borrower- and capital-based, cause a substitution between owner-occupied housing and rental housing markets and that constrained credit supply can cause an excess demand in rental housing markets, increasing rental price growth. This effect is further investigated in countries with homeownership rates higher and lower than 70 %, and in countries with and without rental price control. In countries with homeownership rates lower than 70 %, the tightening of borrower- and capital-based tools decreases housing sales price growth more and increases rental price growth less than in countries with homeownership rates higher than 70 %. Lastly, the substitution effect appears to be slightly stronger in countries without rental price control than in those with it.
{"title":"The effect of macroprudential policy tools on the rental and owner-occupied housing market substitution","authors":"Žaneta Vodrážka","doi":"10.1016/j.cbrev.2025.100220","DOIUrl":"10.1016/j.cbrev.2025.100220","url":null,"abstract":"<div><div>This article examines whether the tightening of macroprudential policy induces a “substitution effect” between owner-occupied and rental housing markets, evidenced by falling housing sales price growth and rising rental price growth. Using a large sample of 39 countries and two different modeling approaches, we produce impulse response functions (IRFs) to show the response of the dependent variables to changes in three groups of macroprudential policy tools: borrower-, capital- and liquidity-based tools. The baseline models use the local projections approach and compare estimates based on data from 2000 Q1 to 2022 Q4 and from 2012 Q1 to 2022 Q4. These baseline estimates are compared to the IRFs estimated by the panel Vector Autoregression model with fixed effects. The results confirm that macroprudential policy tools, especially borrower- and capital-based, cause a substitution between owner-occupied housing and rental housing markets and that constrained credit supply can cause an excess demand in rental housing markets, increasing rental price growth. This effect is further investigated in countries with homeownership rates higher and lower than 70 %, and in countries with and without rental price control. In countries with homeownership rates lower than 70 %, the tightening of borrower- and capital-based tools decreases housing sales price growth more and increases rental price growth less than in countries with homeownership rates higher than 70 %. Lastly, the substitution effect appears to be slightly stronger in countries without rental price control than in those with it.</div></div>","PeriodicalId":43998,"journal":{"name":"Central Bank Review","volume":"25 4","pages":"Article 100220"},"PeriodicalIF":1.2,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145229989","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-01Epub Date: 2025-11-22DOI: 10.1016/j.cbrev.2025.100227
Michael Pedersen
This paper examines how U.S. consumers form twelve-month-ahead expectations about gasoline prices using data from the New York Fed's Survey of Consumer Expectations (SCE). Understanding how households interpret movements in a salient and volatile price component helps clarify the behavioral mechanisms underlying inflation dynamics. The analysis combines SCE microdata with state-level gasoline prices, expert forecasts from the U.S. Energy Information Administration (EIA), and a measure of consumer disagreement within a panel regression framework. The EIA forecast serves as a proxy for other information consumers may be exposed to, such as media coverage or expert assessments. The results show that consumers incorporate both recent local price changes and broader informational cues, but the relative importance of these sources differs across demographic groups and inflation environments. Older respondents react more strongly to observed price changes, consistent with experience-based learning, whereas men and those with higher education and income place greater weight on professional information. Interestingly, and in contrast to evidence on general inflation expectations, men report higher expected gasoline price increases than women. Consumers also exhibit asymmetric behavior, updating expectations mainly when gasoline prices fall, and the influence of informational signals is stronger when inflation is moderate. Overall, the findings indicate that expectation formation is heterogeneous and state-dependent, shaped by differences in information access and processing, with implications for inflation persistence and monetary policy communication.
{"title":"Consumers’ gasoline price expectations: Who reacts to what?","authors":"Michael Pedersen","doi":"10.1016/j.cbrev.2025.100227","DOIUrl":"10.1016/j.cbrev.2025.100227","url":null,"abstract":"<div><div>This paper examines how U.S. consumers form twelve-month-ahead expectations about gasoline prices using data from the New York Fed's <em>Survey of Consumer Expectations</em> (SCE). Understanding how households interpret movements in a salient and volatile price component helps clarify the behavioral mechanisms underlying inflation dynamics. The analysis combines SCE microdata with state-level gasoline prices, expert forecasts from the U.S. Energy Information Administration (EIA), and a measure of consumer disagreement within a panel regression framework. The EIA forecast serves as a proxy for other information consumers may be exposed to, such as media coverage or expert assessments. The results show that consumers incorporate both recent local price changes and broader informational cues, but the relative importance of these sources differs across demographic groups and inflation environments. Older respondents react more strongly to observed price changes, consistent with experience-based learning, whereas men and those with higher education and income place greater weight on professional information. Interestingly, and in contrast to evidence on general inflation expectations, men report higher expected gasoline price increases than women. Consumers also exhibit asymmetric behavior, updating expectations mainly when gasoline prices fall, and the influence of informational signals is stronger when inflation is moderate. Overall, the findings indicate that expectation formation is heterogeneous and state-dependent, shaped by differences in information access and processing, with implications for inflation persistence and monetary policy communication.</div></div>","PeriodicalId":43998,"journal":{"name":"Central Bank Review","volume":"25 ","pages":"Article 100227"},"PeriodicalIF":1.2,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145738885","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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