Owner Occupied Housing, Inflation, and Monetary Policy

Owner Occupied Housing, Inflation, and Monetary Policy

Owner-occupied housing (OOH) is currently excluded from the Harmonized Index of Consumer Prices (HICP) in Europe. Using micro-level data for Sydney and aggregated data for the US, France and Germany we compare the impact of alternative treatments of OOH on measured inflation. We recommend including OOH in the HICP using a simplified version of the user-cost method. This would improve the harmonization of the HICP, help close the credibility gap between measured inflation and public perceptions of it, and allow the ECB to lean against a housing boom without departing from its inflation target.

Hill, R. J., Steurer, M. und Waltl, S. R. (2023): Owner Occupied Housing, Inflation, and Monetary Policy, in: Journal of Money, Credit and Banking, doi: https://doi.org/10.1111/jmcb.13059.

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