Working Paper

• United in Booms, Divided in Busts: Regional House Price Cycles and Monetary Policy, joint with Ulrich Roschitsch.
  Revise and resubmit at AEJ: Macro, 2026
  Abstract: This paper shows that regional disparities in house price growth increase during house price busts. We link this to intensified house price belief extrapolation in busts and regional housing market heterogeneities. To explain this observation, we build a multi-region currency union model with a housing sector and extrapolative house price beliefs, introducing a novel method to handle such models efficiently. Analytically, we show that heterogeneities generate differences in house price growth, while extrapolation amplifies them. Quantitatively, the model matches the observed empirical patterns. Monetary policy targeting house prices stabilizes output and house prices, improving welfare relative to an inflation-targeting benchmark.
  
  

• House Price Extrapolation and Business Cycles: A Two-Agent New Keynesian Approach, joint with Ulrich Roschitsch.
  Abstract: This paper examines the interaction between housing and business cycles in a tractable two-agent New Keynesian model featuring extrapolative house price beliefs. The model includes a saver and a hand-to-mouth borrower who uses housing as collateral. We identify four key transmission channels from housing markets to aggregate output: consumption, residential investment, collateral, and fire sales. Under rational expectations, output volatility is limited and primarily driven by consumption. In contrast, extrapolative beliefs significantly amplify output volatility, mainly through residential investment. Finally, we propose a novel solution approach for two-agent models with asset trade and asset price extrapolation, which is essential for solving models with fire sale motives.
  
  

• Transmission of Monetary Policy in a Currency Area with Heterogenous Households, joint with Lukas Hack.
  Abstract: Monetary policy has heterogeneous effects on real GDP and inflation across Euro Area member states. To investigate the underlying drivers we construct a two-region currency union model with idiosyncratic risk and cross-region household heterogeneity. The model matches household-level heterogeneity in homeownership rates, mortgage types, and the prevalence of hand-to-mouth households. These features account for 70% of the cross-region differences in GDP responses to monetary policy shocks. This is primarily driven by the interplay of demand amplification through hand-to-mouth households, and demand dampening through trade effects.