Inclusive Growth

Global Housing Watch

Forecasting Follies

Energy & Climate Change

5 Things You Need to Know About the IMF and Climate Change

From an IMFBlog post by Ian Parry (IMF):

“The world is getting hotter, resulting in rising sea levels, more extreme weather like hurricanes, droughts, and floods, as well as other risks to the global climate like the irreversible collapsing of ice sheets. 

Here are five ways the IMF helps countries move forward with their strategies as part of their commitment to the 2015 Paris Agreement on Climate Change.

  1. Mitigate emissions. Carbon taxes, or similar charges for the carbon content of coal, petroleum products, and natural gas, are potentially the most effective instruments to reduce carbon dioxide emissions, the major source of heat-trapping gases. These taxes are straightforward to administer, for example, building off existing fuel excises, and can raise significant revenue for government that they might use to cut other burdensome taxes on the economy, or fund growth-enhancing investments.The IMF provides practical guidance on the design of fiscal policy to mitigate climate change. We are developing spreadsheet tools to help countries gauge the emissions, and broader fiscal and economic impacts of carbon pricing, and the trade-offs across alternative mitigation instruments like taxes on individual fuels, emissions trading, and incentives for energy efficiency.For example, our annual economic review for China showed that a carbon tax, or just a tax on coal use, would be significantly more effective at reducing carbon and local air pollution emissions than emissions trading systems which do not cover emissions from vehicles and buildings, and would also raise substantial revenue.And according to our forthcoming working paper, a $70 price per ton on carbon dioxide emissions in 2030, which would increase gasoline prices by about 60 cents per gallon, and more than triple coal prices, would be more than sufficient to meet mitigation pledges in some advanced and emerging market economies like China, India, Indonesia, and South Africa. That price would be nearly sufficient in some other countries like Turkey and the United States, but well short of what Australia, Canada, and some European countries need.These differences in the ability of the $70 price to meet mitigation pledges reflect both differences in the stringency of commitments, and in the responsiveness of fuels and emissions to pricing. For example, emissions tend to be more responsive to pricing in countries that use a lot of coal, like China, India, and South Africa. 

  2. Energy subsidy reform. Pricing carbon should be part of a broader strategy to reflect the full range of social costs in energy pricing. This includes deaths from air pollution and other local environmental side effects from fuel use. A spreadsheet tool provides, for all member countries, estimates of the energy prices needed to reflect supply, and all environmental costs, as well as the implicit subsidies from underpricing fossil fuels.According to IMF estimates, efficient energy pricing would have reduced global carbon emissions in 2013 by over 20 percent, and fossil fuel air pollution deaths by over 50 percent, while raising revenues of 4 percent of GDP.

    IMF case studies of numerous countries’ reforms distill the ingredients for successful reform. One especially important ingredient is compensation for low-income households, which generally requires only a small fraction of the revenues generated from reform. We discuss energy price reforms as part of our annual review of a country’s economy, as well as in our technical assistance work with countries like Saudi Arabia , Jordan, United Arab Emirates, and in our courses and workshops.”

Continue reading here.

From an IMFBlog post by Ian Parry (IMF):

“The world is getting hotter, resulting in rising sea levels, more extreme weather like hurricanes, droughts, and floods, as well as other risks to the global climate like the irreversible collapsing of ice sheets. 

Here are five ways the IMF helps countries move forward with their strategies as part of their commitment to the 2015 Paris Agreement on Climate Change.

Read the full article…

Posted by at 7:07 AM

Labels: Energy & Climate Change

House Prices in Switzerland

The IMF’s latest report on Switzerland says that:

“Private sector leverage and real estate exposure is high. The growth rate of mortgage claims has slowed from a high base, but these claims increase by about 5 percentage points of GDP per year. Liquidity and capital of domestically-focused banks exceed regulatory minima, and profits have held up despite narrowing interest spreads. Following a series of macroprudential tightening measures during 2012–14, property prices subsequently stabilized, but have risen again recently alongside moderating mortgage interest rates. Reflecting their status as attractive global cities and internationally-traded assets, property prices in Geneva and Zurich have been among the fastest growing in the world. However, standard housing-price metrics do not indicate significant misalignment. Newer-vintage mortgages appear riskier, with nearly half exceeding indicative affordability thresholds and also carrying higher loan-to-value ratios, especially those for purchasing
investment properties.”

The IMF’s latest report on Switzerland says that:

“Private sector leverage and real estate exposure is high. The growth rate of mortgage claims has slowed from a high base, but these claims increase by about 5 percentage points of GDP per year. Liquidity and capital of domestically-focused banks exceed regulatory minima, and profits have held up despite narrowing interest spreads. Following a series of macroprudential tightening measures during 2012–14, property prices subsequently stabilized,

Read the full article…

Posted by at 10:08 AM

Labels: Global Housing Watch

What makes a country good at football?

From a new article from the The Economist:

The Economist has built a statistical model to identify what makes a country good at football. Our aim is not to predict the winner in Russia, which can be done best by looking at a team’s recent results or the calibre of its squad. Instead we want to discover the underlying sporting and economic factors that determine a country’s footballing potential—and to work out why some countries exceed expectations or improve rapidly. We take the results of all international games since 1990 and see which variables are correlated with the goal difference between teams.” “Our model explains 40% of the variance in average goal difference for these teams.”

From a new article from the The Economist:

The Economist has built a statistical model to identify what makes a country good at football. Our aim is not to predict the winner in Russia, which can be done best by looking at a team’s recent results or the calibre of its squad. Instead we want to discover the underlying sporting and economic factors that determine a country’s footballing potential—and to work out why some countries exceed expectations or improve rapidly.

Read the full article…

Posted by at 10:37 AM

Labels: Forecasting Follies

Optimal Monetary Policy For the Masses: the James Bullard and Larry Summers View

A new post by David Beckworth summarizes a new paper by James Bullard and Ricardo DiCecio:

“This paper builds upon the risk-sharing view of NGDP targeting. The basic idea is that in a world of fixed-price nominal debt contracts (i.e. the real world), a NGDP level target provides better risk sharing among creditors and debtors against economic shocks than does a price stability target.

This is because a NGDP level target makes inflation countercyclical. During recessions, inflation rises and causes creditors to bear some of the unexpected pain by lowering the real debt payments they receive from debtors. During booms, inflation falls and allows creditors to share in some of the unexpected gain by increasing the real debt payments they receive from debtors. Debtors, in other words, bear less risk during recessions but also share unexpected gains during expansions.

NGDP level targeting, in other words, causes a fixed-price nominal debt world to look and feel a lot like an equity-world. In a similar spirit, some observers have called for a risk-sharing mortgages as a way to avoid another Great Recession. The point of this paper is that the same benefit that such risk-sharing mortgages would bring can be had by having a central bank target the growth path of NGDP.”

A new post by David Beckworth summarizes a new paper by James Bullard and Ricardo DiCecio:

“This paper builds upon the risk-sharing view of NGDP targeting. The basic idea is that in a world of fixed-price nominal debt contracts (i.e. the real world), a NGDP level target provides better risk sharing among creditors and debtors against economic shocks than does a price stability target.

This is because a NGDP level target makes inflation countercyclical.

Read the full article…

Posted by at 10:32 AM

Labels: Inclusive Growth

Housing View – June 15, 2018

On cross-country:

 

On the US:

  • Housing and expenditures: before, during, and after the bubble – Bureau of Labor Statistics
  • Luxury Dorms Are Struggling to Fill Beds – Bloomberg
  • Housing Sentiment Continues to Strengthen, but High Home Prices Complicate Consumer Purchase Confidence – Fannie Mae
  • Developers are taking on residential building challenges by extending the concept of prefabricated housing to manufacture entire apartment buildings – New York Times
  • Finding Common Ground on Rent Control – Terner Center for Housing Innovation
  • Reported Mortgage Demand Falls to Three-Year Low, Fueling Lenders’ Negative Profit Margin Outlook – Fannie Mae
  • Affordable Housing Is Your Spare Bedroom – New York Times
  • Philadelphia Wants To Tax Housing Construction to Make Housing Cheaper – Reason
  • Home Equity Lines of Credit Increase 14 Percent in Q1 2018 – ATTOM

 

On other countries:

  • [Canada] ‘Growth coalition’ kept foreign money flowing into B.C. real estate, professor says – Globe and Mail
  • [Canada] Uncertainty reigns, though Ford’s win may signal shift for Ontario housing policy – Globe and Mail
  • [Canada] Foreign buying of Vancouver real estate—beware the siren call of sovereignty – Straight
  • [Czech Republic] Czech central bank caps mortgage loans as property prices soar – Reuters

 

Photo by Aliis Sinisalu

On cross-country:

 

On the US:

  • Housing and expenditures: before, during, and after the bubble – Bureau of Labor Statistics
  • Luxury Dorms Are Struggling to Fill Beds – Bloomberg
  • Housing Sentiment Continues to Strengthen,

Read the full article…

Posted by at 5:00 AM

Labels: Global Housing Watch

Home Older Posts

Subscribe to: Posts