Quantitative easing and the Swedish housing market

Abstract: This study examines the impact of quantitative easing on house prices in Sweden, the United States and the United Kingdom, using a vector autoregressive (VAR) model, covering the balance sheet policies of the central bank from January 2015 to December 2021. Results from the impulse response functions provide evidence that a positive shock to the balance sheet have a positive impact on house prices in all countries, but the effects vary greatly between the countries. However, the result show that there is no clear negative reaction in any country to house prices as a result of a mortgage interest rate shock, which contradicts the underlying economic theory.