Research Catalog

Title

House Prices and Inflation in the Euro Area [electronic resource] / Boris Cournède

Author

Cournède, Boris.

Publication

Paris : OECD Publishing, 2005.

Details

Description

20 p.; 21 x 29.7cm.

Summary

The inflation measure used by the European Central Bank excludes housing costs that are borne by home owners even though they make up more than a tenth of household final consumption expenditure in the euro area. Has the exclusion of owner-occupied housing costs driven a wedge between the official harmonised index of consumer prices (HICP) and the cost of living? To answer this question, a measure of the user cost of housing capital has been constructed for every euro area country (except Luxembourg). User costs are measured taking into account property taxes but net of tax breaks that home owners enjoy on mortgage repayments. The user cost measure is combined with the HICP to derive a "broad" inflation estimate. For the sake of comparison, an alternative estimate has been put together using imputed rents. The main conclusion is that owner-occupied housing costs have an impact. Another important conclusion is that the effect of owner-occupied housing costs on inflation varies noticeably with the method used to incorporate them into the price index. The paper finally discusses the choice of the method from the point of view of economic policy makers. "This Working Paper relates to the 2005 OECD Economic Survey of Euro Area (www.oecd.org/eco/surveys/Euroarea)"

Series Statement

OECD Economics Department Working Papers, 1815-1973 ; no.450

Uniform Title

OECD Economics Department Working Papers, no.450.

Subject

• Economics
• Euro Area

LCCN

10.1787/037842735074

OCLC

oecd-lib-004749

Author

Cournède, Boris.

Title

House Prices and Inflation in the Euro Area [electronic resource] / Boris Cournède

Imprint

Paris : OECD Publishing, 2005.

Series

OECD Economics Department Working Papers, 1815-1973 ; no.450

OECD Economics Department Working Papers, 1815-1973 ; no.450.

Connect to:

http://dx.doi.org/10.1787/037842735074

Indexed Term

Economics

Euro Area

Other Standard Identifier

10.1787/037842735074 doi