Unfortunately, the only country to experiment ever with price-level targeting was Sweden, and for only a brief period in the 1930s. 4 While the experience was generally viewed as positive, there was no assurance that it could be extended to other countries or periods. 5 It was clear that such a dramatic shift in regime called for some intensive research.
Given the importance of housing markets in the evolution of the economy, I will spend a bit more time discussing the performance of this sector over the past five years and the factors that are likely to shape the adjustment process that is now under way.