Regional house price convergence: implications of monetary policy

Abstract

Motivated by the structural change since the adoption of inflation targeting in October 1992, this research investigates regional house price convergence in the UK over the period 1973:Q4–2020:Q4. By using subsample comparisons, results show that all regions in the inflation-targeting regime converges to one club until the Global Financial Crisis. The finding suggests that the successful inflation-targeting policy can promote integration among regions.