In fact, the speculative forces that can sometimes drive equity prices to extremes are less likely to emerge in housing prices. First, buying and selling houses is a lot more expensive and cumbersome than buying and selling equities, which makes taking a speculative position in houses much more difficult.
The commission then published a country-specific report on detailed policy recommendations, covering fiscal consolidation and structural reforms. Moreover, the EU introduced the “Macroeconomic Imbalance Procedure (MIP)” in December 2011, which, as the name suggests, is a surveillance mechanism that aims to prevent and correct macroeconomic imbalances within the EU. This alert system uses a “scoreboard” of 10 indicators as well as detailed country studies.