A research paper by Victor Pontines, Senior Economist at the SEACEN Centre, on “The Real Effects of Loan-to-Value Limits: Empirical Evidence from Korea” has been accepted for publication in Empirical Economics. The article assesses the effects of macroprudential policy by comparing the effects of monetary policy and loan-to-value (LTV) ratio shocks for Korea, an inflation targeting economy and an active user of LTV limits. Its main findings are that:
- both monetary policy and LTV ratio shocks have significant effects on real credit and real house prices;
- indicating that LTV ratios achieved their financial stability objectives in Korea in terms of limiting credit and house price appreciation under an inflation targeting regime.
An earlier version of this study was previously circulated as SEACEN Working Paper No. 1/2020.
