The Unassuming Economist

From a paper by Lin Li, and Guoping Li:

“Using data on analysts’ individual forecasts from all listed companies in China’s A-share market for the period 2007–2022, we document two stylized facts. First, the average forecast error can be predicted by forecast revision. Second, individual forecasts appear to over-react to own revisions and salient public signals, we show that the first fact is inconsistent with standard models of full information rational expectations. The second fact suggests that individuals may be irrational with respect to their use of information. Expectation formation theory suitable for China’s capital market may need to combine information friction and irrational belief.”

From a paper by William Gale, Ian Berlin, and Sam Thorpe:

“How should the United States respond to its unsustainable fiscal outlook? How and when a country should fiscally consolidate depends on its existing circumstances, policies, and institutions. We review the experiences of other countries that attempted consolidations and highlight lessons applicable to the United States. We find that (1) the United States does not face a short-term crisis, so it can employ gradual adjustments, which may minimize short-term harm, (2) consolidation should occur in a strong economy with monetary accommodation, and (3) tax increases (spending cuts) could plausibly play a larger (smaller) role in US consolidations than in European adjustments.”

From a paper by Simona E. Cociuba and James C. MacGee:

“Demographic projections show the majority of OECD economies will see declines in their working-age populations in the coming decades. This is potentially problematic, since young workers account for a large share of net labor reallocation between growing and shrinking industries. To examine if sectoral reallocation costs are exacerbated by an aging population, we develop a three-sector perpetual youth search model with sector-specific human capital. Our model features two interconnected frictions: sectoral preference, which implies that only some workers are mobile across sectors, and a wage bargaining distortion, whereby mobile workers’ outside option of searching in the growing sector dampens the fall in shrinking sector wages, leading to rest unemployment. In our parametrized model, as population growth declines from 3 to  percent, output losses from a one-time reallocation shock of 3 percentage points increase seven-fold to nearly 10 percent of annual GDP, and there are extended periods of high unemployment and low vacancies.”

From a paper by Michał Brzozowski and Joanna Siwińska-Gorzelak:

“This article examines the impact of robotization on the short-term correlation between employment and output. We estimate the Okun’s Law relationship utilizing panel data from 35 OECD countries for the period from 1996 to 2020. Our empirical evidence, backed up by a battery of robustness tests, consistently shows that automation contributes to job-preserving recessions by mitigating increases in unemployment during economic contractions. This challenges common assumptions regarding the detrimental impact of automation on employment. Additionally, we do not find support for the notion that automation causes jobless recoveries.”

On cross-country:

• What is driving European cities’ housing affordability challenge? Housing affordability has emerged as a central challenge across Europe, particularly in major cities and tourist hotspots. – Oxford Economics
• Has Airbnb reached its peak? Brian Chesky, its boss, wants to offer more than just a bed to sleep on – The Economist
• Tourism, Short-Term Rentals and Housing Affordability – European Parliament
• Housing Challenges for Young Europeans – European Parliament
• La especulación inmobiliaria sacude Europa. Las dificultades para los ciudadanos se han agravado a medida que han retrocedido las políticas sociales – El Pais

Working papers and conferences:

• Monetary Policy and Housing Overvaluation – NBER
• Planes Overhead: How Airplane Noise Impacts Home Values – NBER
• Building Segregation: The Long-Run Neighborhood Effects of American Public Housing – UC Davis
• Global Tides on Local Shores: how do international capital flows affect house prices? – University of Zurich
• Aging and Housing Returns – Philadelphia Fed
• The Role of Single-Family Rentals in the U.S. Housing Market – St. Louis Fed
• Multifamily housing operators describe a “precarious position”. Apartment owners and managers report more financial stability now than last year, but say there’s lots more uncertainty ahead – Minneapolis Fed

On Australia and New Zealand:

• [Australia] There’s a catch in the plan to build more affordable housing in Sydney – and tenants are feeling the brunt. As the NSW developer bonus leads to older buildings being knocked down to make way for new, low-cost renters fear being priced out of their neighbourhood – The Guardian
• [Australia] Australia’s home prices surge by most in over two years in October – Reuters
• [Australia] RBA holds official interest rate at 3.6% while warning of rising house prices and rents. Reserve Bank’s decision to leave cash rate on hold was widely expected and major banks predict no interest rates cut until 2026 – The Guardian
• [Australia] More homes, better cities: Letting more people live where they want – Grattan Institute

On other countries:  

• [Canada] Canadian Snowbirds Are Ducking Out of the U.S. Housing Market Over Trump Tariffs—but These Sun-Soaked Spots Still Shine – Realtor.com
• [Canada] Toronto Home Sales Dip as Tariff Fears Keep Buyers Sidelined – Bloomberg
• [Korea] South Korea’s Housing Market Is a ‘Ticking Bomb,’ President Says – Bloomberg
• [Netherlands] As the Dutch Vote, One Issue Carries the Day: Affordable Housing. The small European nation of 18 million people is in the middle of its worst housing crunch in decades. But there is no quick political solution. – New York Times
• [United Kingdom] How new renters’ rights could drive landlords out of the market – The Conversation
• [United Kingdom] Britain’s housing chief is channeling Trump. Labour MPs are getting queasy. Steve Reed’s donning the red hat and bringing the energy — but is he risking Labour seats? – Politico
• [United Kingdom] What will Labour sacrifice for its housing targets? A standoff in south London is putting it to the test – The Guardian
• [United Kingdom] New homes: even if you build them, there’s no one to buy them. We’re often told housing demand exceeds supply — so why are new homes struggling to be built and bought? – FT
• [United Kingdom] UK net mortgage approvals hit 9-month high despite Budget tax fears. BoE figures show activity in housing market remains resilient – FT
• [United Kingdom] UK House Prices Increase Again in October, Nationwide Says – Bloomberg
• [United Kingdom] UK house prices rise in October, defying pre-budget nerves – Reuters
• [United Kingdom] Rachel Reeves plans Budget tax raid on expensive homes. UK chancellor predicted to plump for ‘least worst option’ of creating higher council tax bands in England – FT
• [United Kingdom] UK house price growth slows as buyers ‘sit on sidelines’ before budget. Amid talk of property taxes, average price of home rose by 0.3% in October to £272,226, Nationwide says – The Guardian
• [United Kingdom] ‘Out of reach’: stalled newbuilds leave Labour’s social housing targets in tatters. As some families face a 200-year wait for an affordable home, what exactly has gone wrong? – The Guardian
• [United Kingdom] Average house prices to increase by 22.2% over the next five years – Savills