Monetary Analysis of Housing Market Bubble in Iranian Economy

The housing market is one of the most important capital-financial markets as its upheavals have always had major impacts on national and global economies. The market is constantly faced with speculative volatilities، which is different in nature form the inherent volatility of prices in other financial markets; since the rise and fall of prices are so massive and uncontrollable; or in other words، prices are bubble-like. Among the most important exogenous factors directly or indirectly causing the formation of this phenomenon، are monetary policies. In this regard، the main purpose of this study is to investigate the effect of monetary factors on the housing market bubble with using the ARDL estimation model and annual data over the period 1990 - 2011. In this way، short-term، long-term and dynamic effects of the followings on the housing price bubble are estimated: exchange rates، gold prices، stock Index، liquidity growth، interest rates، inflation and oil revenues. The results of this study indicate a significant relationship between all independent variables and the dependent variable during the study periods. Moreover، error correction coefficient in the dynamic relationship is equal to -0. 58 which is implies stability of the model.