Macroprudential Policy and Housing Wealth Inequality: Evidence from the Euro Area, with Álvaro Fernández-Gallardo (Bank of Spain).[SSRN]
We estimate the impact of macroprudential policy on housing wealth inequality among individual euro area households. We begin by using narrative-identified macroprudential policy shocks in a local projection framework to estimate the aggregate causal effects of these policies on credit and house prices in Germany, France, Italy, and Spain. Next, we distribute these country-specific aggregate effects across households through a reduced-form simulation using microdata. We consider three counterfactual scenarios consistent with the estimated aggregate response to a macroprudential policy tightening shock: (i) exclusion from the housing market due to tighter mortgage access, (ii) housing wealth changes induced by house-price movements, and (iii) the joint effect of both channels. Relative to a no-regulation counterfactual, macroprudential tightening reduces net housing wealth across the income distribution, with the largest losses generally concentrated among lower- and middle-income households and the smallest among those at the top. Although the incidence varies across countries, the policy increases housing wealth inequality in all four economies. We corroborate this conclusion with time-series estimates of housing wealth inequality.
Presented at: 1st Madrid Macro Mountain Conference 2025, 4th CEMLA/Dallas Fed Financial Stability Workshop 2025 , SAEe 2025, Workshop on Global Housing Markets and the Macroeconomy 2026, IEA 2026, Spring 2026 Midwest Macroeconomics Meeting, XXVIII Applied Economics Meeting, IMAEF 2026.
Blog: Blog de Economía de la Aldea Global (bAg)
Award: Applied Economic Analysis Young Researcher Award.
Networked UK Housing Markets: Implications for Systemic Risk and Macroprudential Policy, with Iván Payá (UA). [SSRN]
This paper examines the evolving network structure of regional house prices in the UK and its implications for interregional dependencies, systemic risk, and financial stability. We adopt a connectivity measure based on time-varying Granger causality to track the strength, direction, and persistence of interregional linkages. Connectivity displays a persistent upward drift, with periodic fluctuations over the sample, indicating an increasing potential for housing-market contagion. Decomposing connectivity into centrality and fragility reveals a stable structure in which house prices in southern regions consistently lead movements in northern regions, while also uncovering a novel and sharply differentiated role for London’s two sub-regions within the UK housing network. We further show that connectivity is countercyclical with respect to the house price cycle. Linkages strengthen during downturns, implying that systemic fragility rises precisely when house prices are falling and balance sheets are under pressure, thereby heightening the scope for amplification mechanisms. In addition, housing-market and regional business-cycle connectivity exhibit no systematic association, a disconnect that may have consequences for housing affordability. Finally, we show that macroprudential transmission varies with housing-network dynamics, positioning connectivity as a state variable for financial stability.
Presented at: 4th CEMLA/Dallas Fed Financial Stability Workshop 2025, Workshop on Global Housing Markets and the Macroeconomy 2026, 33rd Finance Forum 2026.
Monetary policy has heterogeneous effects across U.S. regional housing markets. This paper shows that this heterogeneity is driven by time-varying local factors, such as housing supply elasticities and credit conditions. Using a two-step empirical strategy, I find that expansionary monetary policy produces larger house price increases in more supply-constrained MSAs, while construction activity responds more in more elastic markets. In addition, the response of local housing markets to monetary easing is stronger in regions where financial deregulation occurred earlier. These findings highlight the role of evolving local housing and financial conditions in shaping monetary policy transmission, with potential implications for housing affordability, local wealth effects, and geographically diversified real estate portfolios.
Presented at: XV Jornadas Internacionales de Política Económica 2021 and 33rd Finance Forum 2026.
The Unintended Consequences of COVID-19 on Human Capital Development: The Housing Channel, with Enrique Martínez-García (Dallas FED), Iván Payá (UA), and Tryg Aanenson (Dallas FED). Draft coming soon!
We study whether COVID-19 disrupted a pre-existing process of achievement convergence across U.S. public school districts. We adapt the beta-convergence framework from the economic growth literature to educational achievement, using SEDA data for nearly 6,000 districts over 2009--2024 in district fixed-effects panel models. We find strong pre-pandemic beta-convergence: districts with lower initial achievement experienced systematically faster gains over time. After COVID, this relationship weakens sharply, consistent with a structural break in catch-up dynamics. We also show that the post-COVID flattening of aggregate convergence does not reflect uniform losses, but rather a “hollowing out” of the middle of the distribution: middle-performing districts experienced the largest losses and downward mobility, while top-performing districts were more resilient. Finally, we test a housing-market amplification mechanism that can account for the post-pandemic break in convergence using 3.8 million CoreLogic transactions matched to school districts and time-varying measures of COVID restrictions, school closure mandates, learning modality, and effective mobility. Results show that stricter restrictions increased the house-price premium in areas served by pre-COVID higher-quality districts, consistent with intensified pandemic-era residential sorting and widening differences in local fiscal capacity. More broadly, the results suggest that school finance systems that rely heavily on local property tax bases may be particularly exposed to shock-induced divergence in recovery capacity.
The effects of monetary policy on income and wealth inequality in the US. Exploring different channels, with Juan-Francisco Albert (UV) and Antonio Peñalver (UMH). Structural Change and Economic Dynamics (2020), 55, 88-106.
We assess the effects of monetary policy shocks on income and wealth inequality through direct inequality measures and by analyzing several transmission channels explored in recent literature. Furthermore, we analyze two additional channels: the Housing and the Fiscal channels. The methodology adopted is a Bayesian proxy SVAR using a high-frequency identification based on the external instruments approach. Our own policy shocks are constructed for this purpose. The results show that an expansionary monetary policy shock does not have a significant effect on income inequality due to the existence of opposite channels, whereas it increases wealth inequality mainly through the portfolio channel.