The Effects of Fiscal and Monetary Policies Shocks on Housing Market Variables in Iran: A SVAR Approach

In this research, we use three eight-variable structural VAR models and seasonal data over 1991-2008 to investigate the effects of fiscal and monetary policies shocks on housing market variables in Iran. In order to achieve the goals such as price stability in this market, monetary and fiscal-policy makers should be aware about the effects of these policies. Thus, the main question is that how the implementation of fiscal and monetary policies impact the housing market variables in Iran? The results confirm that the fiscal and monetary policies are not appropriate instruments to control housing price in the short-run, but these policies could have an important role in determining housing price in the long- run: via money supply and government expenditures. On the other hand, the fiscal policy is not an appropriate instrument to control residential investment and housing starts, but the monetary policy could be an appropriate and effective instrument for the control of these variables.