How to prick local housing bubbles in a monetary union: regulation and countercyclical taxes, by Alan Ahearne, Juan Delgado and Jakob von Weizsäcker.
VOX. Research-based policy analysis and commentary from leading economists
Housing booms associated with credit booms are particularly damaging, but the ECB’s one-size-fits-all monetary policy is useless in pricking national bubbles. Euro area governments should use national banking regulations to dampen national bubbles and countercyclical housing taxes to prick bubbles that arise.