Abstract

My research centers on international capital flows, global financial intermediaries, and the drivers of the globalization of housing markets. In my job market paper, I show that US net capital inflows drive the international synchronization of house price growth through the topography of the global banking network. US net capital inflows improve US dollar funding conditions of non-US and specifically European global banks, allowing them to increase leverage by borrowing in US dollars and to expand foreign interbank lending to borrowing countries. This induces a synchronization of lending across borrowing countries, which translates into a synchronization of mortgage credit growth and ultimately house price growth. Importantly, this synchronization is driven by non-US global banks' common but heterogeneous exposure to US dollar funding conditions, not by the common exposure of borrowing countries to non-US global banks. Our results therefore identify a novel channel of international transmission of US dollar funding conditions: As these conditions vary over time, borrowing country pairs whose non-US global creditor banks are more dependent on US dollar funding exhibit higher house price synchronization.

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