The price of policy: how low ECB rates fueled house price inequality

By Nektarios Michail

Let’s start with a history reminder: following a “peak” at 0.75 per cent in mid-2011, the ECB continued to cut its policy rates until the deposit facility rate reached zero, exactly a year later, and then, in an unprecedented move, pushed the rate below zero around two years after that (June 2014). The cited rationales for such a move were the lowering of borrowing costs and the subsequent encouragement of investment and spending, but ultimately it was the effort to boost...