Summary of the General Discussion on “International Co-movement of Housing Price Cycles in East Asia and Greater China”

During the general discussion, several participants noted that the channels through which housing price cycles are transmitted in East Asian countries needed further explanation. In particular, it was suggested to include global shocks. Maria Soccoro-Gochoco Bautista pointed out that the house price indexes used in the analysis closely follow U.S. housing price cycles. She suggested including global financial flows in the analysis, which influence the effectiveness of domestic monetary policy and hence may alter the authors’ conclusion. This view was supported by Wing Thye Woo, who noted that the global monetary system is dominated by the United States, whereas regional capital markets are strongly influenced by Japan. Nominal interest rates in Japan have been virtually zero since 1994, leading to large outflows of capital, some of which is being invested in East Asian housing markets. Jie Li pointed to the unprecedented quantitative easing in the United States and Europe and...