RBA’s Ellis sees gaps in understanding of credit and property price relationship
Head of financial stability discusses what economists do and don’t know about the property market
While there are "strong correlations" between upswings in credit, growth in property prices and "subsequent bad events", it is unclear which variable is the driving force behind them, the Reserve Bank of Australia's head of financial stability, Luci Ellis, said today (September 8).
"What isn't yet settled is whether the credit causes the prices, the property markets drive the credit, or whether either of these is the decisive factor in generating economic downturns or financial distress," she
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