Asymmetric Effects of Monetary Policy on the UK house prices: A Markov- Switching Vector Autoregression model (MS-VAR) Rosen Azad Chowdhury Duncan Maclennan Abstract Empirical studies mainly model monetary transmission mechanism and housing prices as being symmetric across business cycles. However, as the degree of asymmetric information varies with the state of the economy such notion of a symmetric impact may be incorrect. This paper using United Kingdom data captures the asymmetric shocks of macro variables on UK house price from 1980 to end of 2012, employing Markov-switching vector autoregressive (MS-VAR) model and regime dependent impulse responses. The results suggest that the effect of traditional monetary policy is not neutral and the impact varies significantly during boom and bust periods. These findings lead us to believe information asymmetry plays an important role in the economy and in monetary transmission mechanism. Keywords: Switching regression model, monetary economics, real estate economics JEL code: C34, E00, L85