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Macroprudential measures in the housing markets – a note on the empirical literature

Essi Eerola (VATT Institute for Economic Research, Helsinki, Finland)

Journal of Risk Finance

ISSN: 1526-5943

Article publication date: 15 May 2017




The global financial crisis has led to increased attention on the relationship of household indebtedness and systemic risks. As a result, macroprudential measures aimed at reducing the risks have been introduced in many countries. The purpose of this paper is to review the recent empirical literature on the measures targeted at households in the housing markets.


This note reviews and discusses the recent empirical literature on macroprudential measures targeted at households in the housing market as well as housing-related tax policy measures.


To date, the literature mostly consists of cross-country studies using aggregate data and looking at a large set of different measures. The studies typically report associations between the measures and the outcome variables of interest (often credit growth and house price appreciation), but do not assess the causal effects of the different measures or the underlying mechanisms.


Exploiting household data together with policy reforms should be a useful step forward in understanding the effects of the measures and uncovering the mechanisms through which they operate. This would also allow studying the distributional effects of the measures. Understanding the distributional effects is important in its own right, but it is also required because the ultimate goals of the macroprudential policies are related not only to the aggregate level of credit but also to the distribution of leverage.



The author wishes to thank Bonnie Buchanan, Hanna Freysätter, Esa Jokivuolle, Jukka Topi, Fabio Verona, Jouko Vilmunen and an anonymous referee for useful discussions and comments. All errors are the author’s own. A previous version of this note was published as a Bank of Finland discussion paper (Eerola, 2016).


Eerola, E. (2017), "Macroprudential measures in the housing markets – a note on the empirical literature", Journal of Risk Finance, Vol. 18 No. 3, pp. 326-335.



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