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- Title
Discussion of 'Financial innovation and European housing and mortgage markets', by David Miles and Vladimir Pillonca.
- Authors
Honohan, Patrick
- 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.
- Subjects
HOUSE construction; PRICE inflation; MACROECONOMICS; ECONOMIC policy; HOME prices; POLITICAL risk (Foreign investments); FINANCIAL institutions; QUALIFIED residence interest; CONTRACTS
- Publication
Oxford Review of Economic Policy, 2008, Vol 24, Issue 1, p176
- ISSN
0266-903X
- Publication type
Article
- DOI
10.1093/oxrep/grn007