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For immediate release: January 10, 2012

Dallas Fed: House Price Volatility Indicates Break from Great Moderation

DALLAS—Volatility in house price growth in most developed countries substantially reemerged following the 2001 recession, signaling a departure from recent patterns, according to the latest issue of the Federal Reserve Bank of Dallas’ Economic Letter.

Economic Letter can be found at: /en/research/eclett/2012/el1201.aspx.

In “Increased Real House Price Volatility Signals Break from Great Moderation,” research analyst Adrienne Mack and senior research economist Enrique Martínez-García find a shift in the volatility of real house price growth seems to have occurred over the last decade without a similar change in volatility of real GDP growth.

This increase in volatility of house price growth represents a departure from patterns seen since the mid 1980s, a period of diminished macroeconomic volatility known as the “Great Moderation,” the authors state.

Their findings are based on the Dallas Fed’s new database of international house prices for 19 of the most developed countries in the Organization for Economic Cooperation and Development. The new database is available at the following link:




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