The Unassuming Economist

From a paper by Princewill Okwoche, Abdiaziz Abdikadir Ahmed, and Emmanuel Aondongusha Asu:

“East Africa has recorded strong economic growth over the past three decades alongside a steady rise in carbon emissions, raising concerns about whether the region can sustain growth without worsening environmental pressures. This study incorporates key macroeconomic drivers of carbon emissions using panel data for 9 countries from 1990 to 2023, aiming to differentiate between capital-driven and trade-driven globalization. Additionally, the output-emissions nexus is re-examined. Empirical analysis employs the panel fully modified ordinary least squares with robustness checks for heterogeneity and cross-section independence, using panel quantile regression and fixed effects with Driscoll and Kraay standard errors. The results show, first, strong support for the pollution haven hypothesis, as FDI consistently raises emissions across specifications. Second, the environmental effect of trade is mixed and conditional. Trade appears pollutions-increasing in simple nonlinear models (without controls) but becomes insignificant once controls are imposed. An emissions-reducing effect emerges in specifications modeling income nonlinearity and at higher emissions quantiles. Third, the income-emissions nexus follows a monotonic cubic form with a single inflection point, where emissions rise with income at an increasing rate initially, before beginning to decelerate at higher income levels. Finally, urbanization, financial development, and especially energy intensity are robust positive drivers of emissions. The results emphasize the need for stronger environmental governance around FDI, cleaner trade integration, and reforms that reduce energy intensity and guide urban and financial development toward a low-carbon path. We discuss other policy recommendations based on the findings.”

From a paper by Sylvester C. W. Eijffinger, and Jakob de Haan:

“Thirty years ago, when we wrote our Princeton essay about the political economy of central bank independence, the theoretical and empirical arguments for independent central banks seemed to be obvious (Eijffinger and de Haan, 1996). Nowadays it seems that these arguments are questioned by many politicians.
According to Rogoff (2019), “central bank independence is rarely granted by constitutional decree, and even where it is, the letter of the law has little meaning if political support is lacking”. As Rogoff notes, if monetary policy is politicized, once inflation rises, it will be very difficult to bring it under control and to protect monetary policy from further political interference. Some recent examples of central banks where independence and credibility have been severely compromised and where inflation and interest rates have drifted away from healthy levels should serve as a useful reminder, e.g. Argentina, Türkiye, Venezuela, and Zimbabwe. Other authors support this view and relate it to the limited mandate for the central bank in the past. Wachtel and Blejer (2020) asked whether statutory independence implied a limited mandate for the central bank, given the requirement in democratic societies that independent central bankers be held accountable for their activities, meaning that the results of their actions should be easily comparable with those mandated. The authors asked whether this limited mandate, in turn, led central bankers to ignore financial stability concerns. Reasoning along similar lines, Tucker (2018) asked whether central banks’ involvement in the conduct of macro-prudential policies rendered their independence problematic. Indeed, central banks may be confronted with the trade-off between their monetary policy and macro-prudential responsibilities in the long run.
Legal independence is a necessary but not sufficient requirement for actual central bank independence. Forder (2022) emphasizes that practice may differ from the letter of the law, that is, politicians may be able to exert pressure on central bankers: “It is the structure of incentives and constraints that determines the effect of any rule, not the legislators’ intent in drafting it” (p. 552). However, giving up legal independence is not the proper way forward. As Issing (2013, p. 282) put it: “If the central bank’s independent status is exposed to strong political opposition, giving up independence de facto might be seen as an option to preserve de jure independence. However, this would come at the expense of undermining the fundament of independence for the central bank”.”

From a paper by Claus Brand, Gavin Goy, and Wolfgang Lemke:

“Using a novel macro-finance model we infer jointly the equilibrium real interest rate r, trend inflation, interest rate expectations, and bond risk premia for the United States. In the model r plays a dual macro-finance role: as the benchmark real interest rate that closes the output gap and as the time-varying long-run real interest rate that determines the level of the yield curve. Our estimated r* declines over the last decade, with estimation uncertainty being relatively contained. We show that both macro and financial information is important to infer r*. Accounting for the secular decline in interest rates renders term premia more stable than those based on stationary yield curve models.”

From a paper by Eliene de Sá Farias, Leonardo Bornacki de Mattos, and Luciano Ferreira Gabriel:

“Global financial disturbances challenge countries’ ability to maintain stable economic performance, raising questions about the effectiveness of monetary policy frameworks. This study evaluates how inflation-targeting (IT) countries respond to external spillovers compared to non-IT economies. Using entropy balancing combined with a differences-in-differences strategy for 1980–2019, we address self-selection and estimate causal effects on real per capita income, debt-to-GDP, and employment. The results indicate that IT adoption may involve higher employment costs under shifting global conditions, while effects on output and public debt vary across income groups. Overall, the findings suggest that IT economies display heightened vulnerability to external spillovers.”

On cross-country:

• Bedrooms for sale highlight the depths of Europe’s housing crisis – Reuters
• Housing crisis: why prices are rising and what the EU is doing about it. Rising house prices and rents are a big concern for many Europeans. Read on for key facts and what the EU is doing about the issue. – European Parliament

Working papers and conferences:

• How Costly Is Permitting in Housing Development? – MIT
• When Monetary and Macroprudential Policies Tighten Together: Evidence from the Czech Mortgage Market – Czech National Bank
• Call for Papers: 6th Workshop on Rent Control on June 22-23 – DIW Berlin
• Nighttime light metrics for analysing urban-rural economic disparities: A case study in 36 Chinese metropolitan areas – Cities

On China:

• The rotten tail of China’s property bust. Officials want to spread the pain as widely as possible – The Economist
• March Kicks Off the Start of Homebuying Season: Are You Ready? – Realtor.com

On Australia and New Zealand:

• [Australia] Australia’s home prices keep rising in February, defying rate hike – Reuters
• [Australia] Sydney Home Prices Flatline While Rest of Australia Stays Strong – Bloomberg
• [Australia] Desperate first home buyers are fuelling price ‘up-crash’ at lower end of market, experts say. Biggest house price increases in February come in smaller capital cities as buyers undeterred by interest rate hikes – The Guardian
• [New Zealand] New Zealand Rolls Out the Welcome Mat for Wealthy American Home Buyers. The country’s budding startup scene and changes to its Active Investor Plus visa program have led to an influx of venture capitalists, entrepreneurs and advisers – Wall Street Journal
• [New Zealand] New Zealand House Prices Edge Higher, While Buyers Stay Cautious – Bloomberg

On other countries:  

• [Austria] Austria’s Residential Property Market Analysis 2026 – Global Property Guide
• [Canada] Toronto Home Prices Decline for a Ninth Month as Fears Persist – Bloomberg
• [Canada] Mortgage Renewal Mission Possible: The Final Reckoning – TD
• [Chile] Chile’s Residential Property Market Analysis 2026 – Global Property Guide
• [Finland] Finland’s Residential Property Market Analysis 2026 – Global Property Guide
• [Hungary] Hungary’s Residential Property Market Analysis 2026 – Global Property Guide
• [Indonesia] Indonesia’s Residential Property Market Analysis 2026 – Global Property Guide
• [Korea] Home Prices in Seoul’s Posh Districts Fall After Yearlong Rally – Bloomberg
• [Peru] Peru’s Residential Property Market Analysis 2026 – Global Property Guide
• [Romania] Romania’s Residential Property Market Analysis 2026 – Global Property Guide
• [Sweden] Sweden’s Residential Property Market Analysis 2026 – Global Property Guide
• Thailand’s Residential Property Market Analysis 2026 – Global Property Guide
• [United Kingdom] UK house prices ‘bunching’ to avoid mansion tax. Buyers and sellers are already pricing homes under new thresholds – FT
• [United Kingdom] UK house prices rise in February as chancellor avoids ‘negative speculation’. Rachel Reeves’s upcoming spring forecast has not led to slowdown, as property tax rumours did in November – The Guardian
• [United Kingdom] UK mortgage approvals fall to lowest level in 2 years. Drop reflects uncertainty among homebuyers around chancellor Rachel Reeves’ November Budget – FT
• [United Kingdom] How the UK mortgage market became so unstable. The market has not been this jittery in decades — and that was before the Middle East conflict – FT
• [United Kingdom] London landlord begins evictions ahead of new renters’ rights law. Asif Aziz’s Criterion Capital owns several apartment blocks in capital as well as Trocadero centre in Piccadilly – FT