Reaching for yield and the housing market: Evidence from 18th-century Amsterdam

Research shows that low interest rates drive investors to seek higher yields, which can hurt the housing market. In 18th-century Amsterdam, wealthy investors’ yield-seeking affected housing prices and rental returns. Examination of bond supply changes showed that capital income investors switched their portfolios toward real estate and other higher-yielding assets during low and dropping bond yields. This increased wealth disparity and house price volatility.

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