Selecting Optimal Monetary Policies for the Peruvian Hous-ing Market Using the Neutrosophic OWA-TOPSIS Model

Authors

Edwin Collazos Paucar, Universidad Nacional Mayor de San Marcos. Lima, PeruFollow
Tomas Francisco Rosales León, Universidad Nacional Federico Villarreal. Lima, PeruFollow
Rilke Chong Vela, National University of the Peruvian Amazon. PeruFollow
Jorge Luis Arrue Flores, Universidad Nacional de la Amazonía Peruana. Iquitos, PeruFollow
Víctor Linares Pezo, Universidad Nacional de la Amazonía Peruana. Iquitos, PeruFollow
María Josefa López Macedo, Universidad Nacional de la Amazonía Peruana. Iquitos, PeruFollow
Cesar Ulises Marín Elespuru, Universidad Nacional de la Amazonía Peruana. Iquitos, PeruFollow

Abstract

This research contributes to the literature where ideal monetary policy selection to increase housing demand in Pe-ru is still lacking for a vulnerable sector that can easily become unstable in times of recession. This research is sig-nificant because policymakers should pay attention to the real estate sector as it has economic and social welfare implications due to the current housing deficit situation across the country and international investors and lenders. Although previous articles have assessed how monetary policy transmits through the housing sector, few pay at-tention to the adoption of uncertainty itself. Therefore, prevailing methods do not comprehensively assess how expected interest rates and public sentiment play a crucial role in decision-making options regarding the housing market. Thus, we fill this gap through the neutrosophic OWA-TOPSIS approach, which allows for uncertainty via neutrosophic numbers and assesses the alternatives of interest rate adjustment and open market operations against the decision-making criteria of housing affordability, housing investment, and financial security. The results show that a hybrid solution of low interest rates with an expansionary strategy best satisfies the housing demand versus financial risk mitigation assessment. This study contributes to the body of literature through a novel solution ap-proach to assessing multifaceted socioeconomic concerns and provides the Central Reserve Bank of Peru with ap-plied research results to formulate monetary policies related to fostering a sustainable housing market, which ul-timately translates to reduced housing inequality.

Recommended Citation

Collazos Paucar, Edwin; Tomas Francisco Rosales León; Rilke Chong Vela; Jorge Luis Arrue Flores; Víctor Linares Pezo; María Josefa López Macedo; and Cesar Ulises Marín Elespuru. "Selecting Optimal Monetary Policies for the Peruvian Hous-ing Market Using the Neutrosophic OWA-TOPSIS Model." Neutrosophic Sets and Systems 84, 1 (2025). https://digitalrepository.unm.edu/nss_journal/vol84/iss1/63