Each of these explanations has different policy implications. Should policymakers try to address external imbalances, increase nancial regulation or redesign the monetary policy framework to prevent future crises? To shed light on this question, we analyse the impact of both monetary policy and capital in ows shocks on the housing sector across 18 OECD countries. We also assess whether the degree of mortgage market development or legislation permitting issuance of mortgage-backed securities amplify or dampen the impact of these shocks on the housing sector
