Affiliation:
1. International Monetary Fund, USA
2. Independent Researcher
3. Harvard Kennedy School of Government and NBER , USA
Abstract
Abstract
We study how the recent run-up in housing and rental prices affects the outlook for inflation in the USA. Housing held down the overall inflation in 2021. Despite record growth in private market-based measures of home prices and rents, the government-measured residential services inflation was only 4% for the 12 months ending in January 2022. After explaining the mechanical cause for this divergence, we estimate that, if past relationships hold, the residential inflation components of the Consumer Price Index (CPI) and Personal Consumption Expenditure (PCE) are likely to move close to 7% during 2022. These findings imply that housing will make a significant contribution to overall inflation in 2022, ranging from one percentage point for headline PCE, to 2.6 percentage points for core CPI. We expect residential inflation to remain elevated in 2023.
Publisher
Oxford University Press (OUP)
Subject
Finance,Economics and Econometrics,Accounting
Reference30 articles.
1. The repeat rent index;Ambrose;Review of Economics and Statistics,2015
2. Forecasting economic time series using targeted predictors;Bai;Journal of Econometrics,2008
3. Laboratories of regulation: understanding the diversity of rent regulation laws;Been;Fordham Urban Law Journal,2019
Cited by
3 articles.
订阅此论文施引文献
订阅此论文施引文献，注册后可以免费订阅5篇论文的施引文献，订阅后可以查看论文全部施引文献