The Unassuming Economist

From a paper by Luis I. Jacome, Nicolas E. Magud, Samuel Pienknagura, and Martın Uribe:

“We explore the historical link between populist regimes, fiscal monetization, and inflation, and how these links affect monetary policy in the 21st century. Using data for a large set of advanced economies and emerging markets since 1960, we show that, historically, left-leaning populist regimes are linked to increases in central bank lending to the central government, a gauge of deficit monetization. In turn, central bank lending is associated with marked increases in inflation. We show that past exposure to populism that relied on deficit monetization affects the conduct of monetary policy today. Countries with a history of deficit monetization and left-wing populist regimes systematically respond more strongly to deviations of inflation expectations from target. This effect persists even after controlling for the direct effect of past inflation on monetary policy rules. In the context of the literature of experienced learning, this novel finding sheds light on the persistence of past populist policies—central banks operating under the shadow of past populist regimes that relied on inflation-prone deficit monetization continue today needing to send stronger signals of their independence and commitment to price stability to effectively anchor inflation expectations.”

From a paper by Giuseppe Pio Dachille, Antonio Dalla Zuanna, Monica Paiella, and Eliana Viviano:

“We quantify how the employment expansion accompanying Italy’s post-pandemic recovery mitigated the distributional consequences of the contemporaneous surge in prices, which disproportionately affected households at the bottom of the expenditure distribution. Using linked administrative employment records and household survey and expenditure data, we examine labour income dynamics, employment transitions, differential inflation exposure, and the redistributive role of the tax–benefit system for Italian households without pension or self-employment income over 2018–2023. Despite elevated inflation, households in the lowest expenditure quintile experienced gains in real labour income, whereas those higher in the distribution did not. The decline in inequality is driven primarily by employment entry among previously non-employed household members, while adjustments among continuously employed workers played a limited role. Extensive-margin gains reflect stronger demand for low-skilled labour rather than differential labour-supply responses to inflation. Microsimulations indicate that fiscal measures cushioned disposable incomes at the bottom but did not alter the central role of employment growth in shaping distributional outcomes.”

From a paper by Maridueña-Larrea, Ángel and Martín-Román, Ángel L:

“This study assesses the empirical validity, heterogeneity, and spatial dependence of Okun’s Law
in a global setting. Using annual data for 163 countries over the period 1992–2023, we estimate
country-specific unemployment–output elasticities under two standard specifications (output-gap
and first-difference models) and allow for cyclical asymmetries by distinguishing expansionary and
recessionary phases. The results indicate that Okun’s coefficient is negative and statistically
significant in most countries, although its magnitude is highly heterogeneous and varies
systematically across income groups. Controlling for the common 2020 shock (COVID-19) does
not meaningfully alter statistical significance for most countries, but it generates economically
relevant shifts in the coefficient’s magnitude for a non-negligible subset, thus improving
cross-country comparability. We also document pronounced asymmetry: elasticities are, on
average, stronger during recessions than expansions, particularly among middle- and high-income
economies. Moran’s I statistics reveal positive and significant spatial autocorrelation in cyclical
sensitivities across alternative k-nearest-neighbour weighting matrices, with stronger dependence
during recessions. These findings motivate the design of countercyclical labour-market policies
tailored to structural heterogeneity and coordinated regionally during downturns.”

On cross-country:

• House prices up by 5.1% in the euro area – Eurostat
• EU house prices soar 65% over a decade, rents lag behind – The Brussels Times 
• How can African cities fund growth? Astrid Haas joins us to discuss why African cities are so fiscally constrained, and what reforms in Mexico, the Philippines, and Sierra Leone can teach us. – Ideas in Development  
• New study reveals why housing booms and busts are built into the system. Some policies make it easy – and tempting – for people to gamble on rising house prices – King’s College London

Working papers and conferences:

• The Impact of House Prices on Internal Migration: Case of Spain – IMF
• What goes up, must come down: speculation-encouraging institutions and house price cycles across countries – Socio-Economic Review
• Cyclical Determinants of Regional House Prices in Poland – Cracow University of Technology Poland

On other countries:  

• [Canada] Toronto Home Prices Slip Back to 2020 Levels as Turmoil Lingers – Bloomberg
• [Mongolia] Improving Housing Can Create Jobs in Mongolia’s Cities – World Bank
• [United Kingdom] Stagflation fears demolish confidence in UK housing. Shares across the sector are taking a beating – FT
• [United Kingdom] Renters’ Rights Act brings big changes to UK property market. New rules aim to provide safety and security for tenants, but landlords are anxious – FT
• [United Kingdom] UK house prices fall in March as uncertainty over Middle East war weighs on demand. Halifax reports market slowdown as mortgage rates rise – FT
• [United Kingdom] UK house prices fall in March amid uncertain impact of Middle East conflict. Average price dips back below £300,000 after higher energy costs have knock-on effect on mortgage rates – The Guardian
• [United Kingdom] The hangover from Britain’s student housing boom. Concerns about affordability and community impact are mounting, even as purpose-built accommodation gains traction elsewhere – FT  

On prices, rent, and mortgage:    

• April ICE Mortgage Monitor: “Annual home price growth was 0.4% in March” – Calculated Risk
• Inflation Adjusted House Prices 2.3% Below 2022 Peak. Price-to-rent index is 9.7% below 2022 peak – Calculated Risk

On sales, permits, starts, and supply:    

• America Underbuilt Inc.: The Supply Side of the U.S. Housing Challenge – St Louis Fed
• 1st Look at Local Housing Markets in March – Calculated Risk

On other developments:    

• How a population boom changed North Dakota’s housing markets. Latest data show signs that pre-boom affordability levels haven’t returned everywhere – Minneapolis Fed
• Housing market trends favor home shoppers, but Iran war clouds the outlook for mortgage rates – AP
• Where the New Houses Are—and What That Says About Growth – Barron’s
• Congress is threatening a leading source of single-family homes. A great, bipartisan housing bill could undermine its own objective. – Washington Post
• Mamdani pledged affordable New York housing in his campaign. How is that going? Mayor’s decision to appeal court order that the city must expand its housing voucher program has angered advocates for the homeless – The Guardian
• The housing crisis is a storytelling problem. NIMBY activists dominate the narrative. Pro-housing voices need new themes. – Fast Company
• Event: Bridging the Gap: Unlocking Strategies to Boost Housing Supply on May 4 – Milken Institute
• The Solution to the Housing Crisis That Nobody Has Fixed Yet – Realtor.com 
• This might be the best time to buy a home in years, depending on where you live. A new report shows most major housing markets are no longer dominated by sellers. But rising mortgage rates could offset gains. – Fast Company
• Average Single-Family Home Property Tax Bill Rose 3 Percent in 2025 – ATTOM
• Buyers are entering housing market later in life. Affordability issues, supply crunch mean people are older when they purchase their first homes. – Washington Post