Skip Navigation

Oxford Review of Economic Policy 2008 24(1):176-179; doi:10.1093/oxrep/grn007
This Article
Right arrow Full Text
Right arrow Full Text (PDF)
Right arrow Alert me when this article is cited
Right arrow Alert me if a correction is posted
Services
Right arrow Email this article to a friend
Right arrow Similar articles in this journal
Right arrow Alert me to new issues of the journal
Right arrow Add to My Personal Archive
Right arrow Download to citation manager
Right arrowRequest Permissions
Google Scholar
Right arrow Articles by Honohan, P.
Social Bookmarking
Add to CiteULike   Add to Connotea   Add to Del.icio.us  
What's this?

© The Authors 2008. Published by Oxford University Press. For permissions please e-mail: journals.permissions@oxfordjournals.org

Discussion of ‘Financial innovation and European housing and mortgage markets’, by David Miles and Vladimir Pillonca

Patrick Honohan*
* Trinity College Dublin, e-mail: phonohan{at}tcd.ie


  Abstract

Although their paper stresses the potential merits of a particular financial innovation—a form of shared-ownership indexed contract—Miles and Pillonca surprisingly neglect the role of differential surges of financial innovation in explaining cross-country differences in house-price inflation. The risk-reducing potential of their favoured instrument deserves further analysis, not least because of the sizeable political risk involved: the experience of several other countries that have used indexed mortgage contracts shows their limited robustness to macroeconomic shocks.

Key Words: housing finance • indexation

1 This is a pity, of course, but it could possibly be addressed by adopting some form of error-correction model, in that the formula used by MP is based on equating the change in housing supply and demand, rather than their levels.

2 To be sure, a and b are likely to be negatively correlated, and this would reduce the range of expectations estimates.

3 In this they echo the views of Shiller (2002).


Add to CiteULike CiteULike   Add to Connotea Connotea   Add to Del.icio.us Del.icio.us    What's this?


This article has been cited by other articles:


Home page
 OXF REV ECON POLICYHome page
J. Muellbauer and A. Murphy
Housing markets and the economy: the assessment
Oxf. Rev. Econ. Policy, March 1, 2008; 24(1): 1 - 33.
[Abstract] [Full Text] [PDF]


Disclaimer:
Please note that abstracts for content published before 1996 were created through digital scanning and may therefore not exactly replicate the text of the original print issues. All efforts have been made to ensure accuracy, but the Publisher will not be held responsible for any remaining inaccuracies. If you require any further clarification, please contact our Customer Services Department.