The Unassuming Economist

From a paper by Jan Čapek | Jakub Chalmovianský | Vlastimil Reichel:

“This study systematically evaluates forecasting performance of 11 Dynamic Stochastic General Equilibrium (DSGE) and 2 Bayesian Vector Autoregression (BVAR) models during recessions and expansions in the US and the euro area. Results show that no single model dominates: parsimonious models perform well in stable periods and at short horizons, while richer DSGE specifications with financial frictions, flexible inflation targeting, or labor market dynamics improve forecasts during recessions. BVARs excel in interest rate forecasting, especially in expansions. Crisis‐specific extensions, such as COVID‐related shocks, yield temporary gains. Forecast accuracy depends on the economic state, variable, horizon, and evaluation metric, underscoring the need for a diversified, context‐dependent modeling toolkit.”

From a paper by Georgios Chortareas, Anastasios Evgenidis, and Apostolos Fasianos:

“This paper explores whether the transmission from monetary policy to income inequality may depend on the adoption of Inflation Targeting (IT) regimes. Using an interacted panel VAR, we find that expansionary monetary policy shocks reduce income inequality in countries that have switched to IT regimes. In contrast, in non-IT regimes the same shock is associated with a short-lived increase in income inequality. A decomposition of transmission channels indicates that the employment channel is the primary equalizing mechanism under IT, as expansionary shocks generate stronger improvements in labor market conditions. The financial channel operates in the opposite direction but is quantitatively smaller. We further show that the inequality-reducing effects of monetary policy are not replicated by other institutional features often associated with credibility, such as central bank transparency or central bank independence. Our findings are robust to alternative identification schemes, broader classifications of IT regimes, controls for self-selection into IT adoption, and to conditioning on different inflation environments.”

On cross-country:

• Where Luxury Housing Prices Surged the Most in 2025 – Visual Capitalist

Working papers and conferences:

• Filling the Gaps with MICE: Addressing Missing Data in Real Estate Price Indices – NBER
• Characteristics of a Sufficient Statistic to Measure City Housing Prices – NBER
• Rental Prices and the Cost of Living in the United States, 1914–2006 – NBER
• Does Real Estate Expansion Hurt Manufacturing Employment: Evidence from China – Labour Economics

On Australia and New Zealand:

• [Australia] Australia’s home price growth hits lowest in over a year, led by falls in big cities – Reuters
• [New Zealand] New Zealand House Prices Lack Momentum as Buyers Sidelined – Bloomberg
• [New Zealand] New Zealand house prices lack momentum as buyers sidelined. While they rose for a third straight month in April, the increase was just 0.1% from March: property consultancy – The Business Times

On other countries:  

• [Canada] A New Blueprint: How Modern Methods of Construction can help solve Canada’s housing crisis – RBC
• [Canada] Montreal-area home sales fall 7% in April as rising prices weigh on demand: board – CMT
• [Canada] Millennials in the Canadian housing market: An intergenerational comparison – Government of Canada
• [Estonia] How will Estonia’s declining population affect the property market? – ERR
• [Hong Kong] Hong Kong Property Shares Rally as Morgan Stanley Feeds Optimism – Bloomberg
• [United Kingdom] UK house price rise defies economic impact of Iran war. Unexpected increase in April supported by relative strength in household finances – FT
• [United Kingdom] UK House Prices Rose Again in April, Nationwide Says – Bloomberg
• [United Kingdom] ‘Blue urbanism’ — a key to England’s housing undersupply? Canal-side developments in east London, Bristol, Liverpool and elsewhere are helping to meet building targets — but it’s not all smooth waters – FT

On prices, rent, and mortgage:    

• We Can Return to 20-Year Mortgages. Instead of Lowering Mortgage Rates, Shorten Mortgage LENGTHS. – Real Estate Decoded
• Investors Are Piling Into Flint’s Dilapidated Housing Market. Michigan city’s home prices rose 28% in the first quarter, making it the biggest mover in this year’s WSJ/Realtor Housing Market Rankings – Wall Street Journal
• Will New York Freeze the Rent? A Panel Will Cast Its First Vote. The panel that regulates rents for nearly one million apartments is set to weigh in on potential increases for the first time since Mayor Zohran Mamdani took office. – New York Times

On sales, permits, starts, and supply:    

• Federal Threats on the Horizon Are Killing Housing Supply Growth Now – Cato Institute
• Why developers can’t afford to build affordable housing. Building more affordable housing means first addressing the labor problem causing it. – Washington Post
• A Federal Housing Handout Has Ended. Foreclosures Will Follow. A Biden-era program that prevented distressed borrowers from losing their homes has been rolled back – Wall Street Journal
• April 2026 Monthly Housing Report: Spring Market Weathers Economic Uncertainty – Realtor.com
• NAHB Debuts New Resource that Estimates Quarterly Remodeling Spending by State – NAHB
• Remodeling Growth to Slow Sharply in Early 2027 – Harvard Joint Center for Housing Studies
• New Home Sales Increase to 682,000 Annual Rate in March. Median New Home Price is Down 16% from the Peak due to Change in Mix – Calculated Risk
• New Home Sales Rise, Supported by Limited Existing Inventory – NAHB
• 1st Look at Local Housing Markets in April – Calculated Risk
• New-Construction Insights: Urban New Builds Are Scarce and Expensive – Realtor.com

On other developments:    

• High Housing Costs Are Pushing Foreclosures to a Six-Year High. Homes with foreclosure filings jump 26% in first quarter, partly reflecting rising property taxes and insurance premiums – Wall Street Journal
• Spring Housing Market Remains Resilient Despite Economic Clouds – Realtor.com
• The Return for These Investors Isn’t Money, It’s More Affordable Housing. Local governments are trying to create housing that is permanently affordable by investing directly in construction. They are rewriting how housing programs have traditionally operated. – New York Times
• Trump privately raises objection to Senate housing bill. The president’s concerns could complicate passage of the largest housing measure taken up by Congress in years. – Politico
• The Homebuyer Vibe: Record 55% Say Their Finances Are Getting Worse. The Other 45% Don’t Check. – Housing Notes  
• The Affordable Housing Hiding in Plain Sight. Smaller, older homes are plentiful in many parts of the US. But the financing system that helps people buy or refurbish these fixer-uppers has broken down. – Bloomberg
• The Spring Housing Market Has a Vibes Problem as ‘Fear of Overpaying’ Takes Hold – Realtor.com  
• Timing of housing bill action in the House remains uncertain. House GOP leadership continues to work through the amended text of a bill aiming to increase housing supply and homeownership. – Politico
• The Congressional Progressive Caucus Affordability Agenda Is a Dud. This populism means many simpler ideas to lower prices through expanding supply get ignored – Cato Institute  
• Home Equity Rates Continue to Decline in First Quarter – ATTOM

From a paper by M. Shabri Abd. Majid, F. Faisal, Heru Fahlevi, Maulidar Agustina, A. Azhari, Y. Yahya & Z. Zulkifli:

“Micro, small, and medium enterprises (MSMEs) are widely recognized as key drivers of entrepreneurship and inclusive growth; however, their effectiveness in reducing poverty depends more on the quality of productivity improvements than on the expansion of firm numbers alone. This study investigates how entrepreneurial productivity, measured by total factor productivity (TFP) and its components—efficiency change and technological progress—affects poverty both directly and through the sequential roles of human development (HDI) and economic growth. Using 2,070 panel observations from six sectors across 23 districts in Aceh, Indonesia (2010–2024), productivity is estimated through the Malmquist Index within a Data Envelopment Analysis (DEA) framework. Direct, single, and sequential mediation effects are examined using the Baron and Kenny approach and estimated via Estimated Generalized Least Squares (EGLS) with Seemingly Unrelated Regression (SUR) adjustments. The findings reveal heterogeneous effects across productivity components, highlighting asymmetric transmission mechanisms in which different dimensions of productivity influence poverty through distinct pathways. Increases in TFP and technological progress are associated with reductions in poverty (β ≈ 0.135–0.311), whereas efficiency change is linked to higher poverty levels (β ≈ − 0.117 to − 0.226), reflecting short-term adjustment costs from structural changes. Economic growth emerges as the primary transmission channel, while HDI does not exert a direct effect but significantly strengthens the impact of productivity when it precedes growth in the causal sequence. The strongest poverty reduction occurs when productivity first improves human development and subsequently stimulates economic expansion. Technological progress exhibits mixed effects depending on the mediation pathway, indicating uneven distributional outcomes. Overall, the results suggest that productivity gains do not automatically lead to inclusive welfare improvements. Policy efforts should therefore prioritize innovation-driven and stable productivity growth while mitigating the adverse social effects of abrupt efficiency adjustments. This study contributes by demonstrating that different dimensions of entrepreneurial productivity generate distinct development outcomes and by proposing a sequential mediation framework that explains why some productivity gains alleviate poverty while others intensify it.”