As always, some important questions remain unanswered in this paper. Let us
just mention two of them. First, over the last 30 years, the Euro area index for real
housing prices has tended to follow that of the US quite closely, but with a lag of
around 18 months. Given that the US market turned in mid-2006, one could thus
expect that the Euro area market is likely to do the same as 2007 turns into 2008
(Gros, 2007). Will the world excess liquidity in the end be capable to stop this
trend? Second, there is still empirical work missing which augments national VAR
models with foreign money. We leave these tasks for future research.
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