BoE paper: capital inflows primary cause of US housing bubble
A Bank of England paper published on Monday shows that capital flow shocks played a much larger role in increasing house prices than monetary policy shocks.
Filipa Sá and Tomasz Wieladek, the paper's authors, examine whether external capital inflows or low interest rates caused the boom in house prices that occurred in the United States from the mid-1990s to 2007.
Sá and Wieladek show that the increased liquidity in the US financial system created by global imbalances and the low interest rates
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