The Unassuming Economist

From Vox:

“If Harvard has a most famous course, it’s Economics 10.

The introductory economics class is reliablyone of the most popular courses offered to undergraduates. It’s usually taught in a massive Hogwartsian auditorium, where hundreds of students either dutifully take notes or mess around on laptops as one of the school’s star economists leads them through the basics of supply and demand.

Because Harvard has a tendency to set the pattern for other universities, Ec 10’s textbook is a massive best-seller, used at dozens of other schools, earning its author, professor Greg Mankiw, an estimated $42 million in royalties since it was first released in 1998. Mankiw’s introduction to economics has set the tone not just at Harvard but for how Econ 101 is taught across the country.

Mankiw’s textbook covers the abstract theory that underpins economics as it has been understood for decades. It is about supply and demand, about how prices can be used to match production of a good to its consumption, and about the power of markets as a tool for allocating scarce resources. Students in Ec 10 are asked to plot supply and demand curves, to solve simple word problems about what happens when the mayor of Smalltown, USA, imposes a tax on hotel rooms.

The idea is to impart a basic theory, to lay a foundation for understanding how society works. And that theory strongly implies that markets tend to work without much intervention, and that things like minimum wages might hurt more than help.

But another Harvard economist has a different idea of how to introduce students to economics.

Raj Chetty, a prominent faculty member whom Harvard recently poached back from Stanford, this spring unveiled “Economics 1152: Using Big Data to Solve Economic and Social Problems.” Taught with the help of lecturer Greg Bruich, the class garnered 375 students, including 363 undergrads, in its first term. That’s still behind the 461 in Ec 10 — but not by much.”

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Raj Chetty, professor of economics at Harvard University, poses for a portrait at the Opportunity Insights offices. (Kayana Szymczak for Vox)

On cross-country:

• Financial Stability Review, May 2019 – European Central Bank
• How Housing Supply Became the Most Controversial Issue in Urbanism – CityLab
• Impacts of urban renewal on neighborhood housing prices: predicting response to psychological effects – Journal of Housing and the Built Environment
• “The ‘housing question’ is no longer simply about housing” – Housing Europe

On the US:

• The Fair Housing Act at 50 – Cityspace
• After Amazon HQ2: New York and D.C. Offer a Tale of Two Housing Markets – Yahoo
• Have Changes in Financing Contributed to the Loss of Low-Cost Rental Units and Rent Increases? – Harvard Joint Center for Housing Studies
• Regulations And Failed Governance Are The Root Causes Of California’s Housing Crisis – Hoover Institution
• Monkkonen Guides Discussion of L.A.’s Housing Needs – UCLA

On other countries:

• [Canada] RBC Sidesteps Canada’s Housing Slump With Mortgage Growth – Bloomberg
• [China] Understanding China’s ‘One-Way Bet’ Property Market – Washington Post
• [Hong Kong] Hong Kong Property Back in Bubble Territory, Reinhart Says – Bloomberg

From the Financial Times:

The Greens’ surge in last week’s European Parliament elections confirmed that a growing share of voters want their politicians to do something about climate change. But it is far from clear that the majority is ready to pay the higher energy and fuel prices that would result from any serious effort to limit the rise in global temperatures — and that would hit some groups much harder than others.

Economists, who for years have been debating the best ways to fine-tune carbon pricing mechanisms, are now turning their attention to the bigger challenges of political economy.

A paper by IMF staff, published earlier this month, shows just how far off we are from making carbon as expensive as it needs to be. Many major economies could achieve the emissions cuts pledged under the 2015 Paris accord with a carbon price of $35 per tonne, they calculate — a level that would roughly double coal prices and add 5 per cent to 7 per cent to pump prices for road fuels.

But to contain global warming to 2 degrees centigrade above pre-industrial levels would require a global carbon price of about $70 per tonne, they estimate. At present, despite a proliferation of national and sub-national carbon taxes and trading schemes, the average global carbon price is $2 per tonne.”

 

 

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On cross-country:

• Debate Over Lunch: How Architecture Brings Us Together – OECD
• Identifying booms and busts in house prices under heterogeneous expectations – Journal of Economic Dynamics and Control
• The housing cycle: What role for mortgage market development and housing finance? – Loughborough University

On rent control:

• Housing Supply Dynamics under Rent Control: What Can Evictions Tell Us? – American Economic Association
• Spatial Misallocation and Rent Controls – American Economic Association
• The Effects of Second-Generation Rent Control on Land Values – American Economic Association
• Who Pays for Rent Control? Heterogeneous Landlord Response to San Francisco’s Rent Control Expansion – Stanford University

On the US:

• Press Briefing on the Evolution and Future of Homeownership – Federal Reserve Bank of New York
• An expert’s 7 principles for solving America’s housing crisis – Vox
• Monetary Policy, Housing Rents, and Inflation Dynamics – Federal Reserve Board
• The Great Recession, education, race, and homeownership – Economic Policy Institute
• Why Isn’t The Black Homeownership Rate Higher Today Than When The 1968 Fair Housing Act Became Law? – Forbes
• ‘Fairbnb’ Wants to Be the Unproblematic Alternative to Airbnb – Citylab
• Trump Administration Wants To Cut Funding For Public Housing Repairs – NPR
• California Today: Lawmakers Shelve a Potential Remedy to the Housing Crisis – New York Times
• 3 Top REITs With High Dividend Yields Above 5% And Secure Payouts – Seeking Alpha
• Labor Demand Shocks and Housing Prices Across the United States: Does One Size Fit All? – Economic Development Quarterly
• Undersupply in Housing Inventory – CoreLogic
• Spain’s Richest Person Bets Billions on Prime U.S. Real Estate – Bloomberg
• Despite Resistance, Cities Turn to Density to Tackle Housing Inequality – CityLab
• Special Incentive for Property Buyers: A Foreign Passport – New York Times
• Shortage of cheaper houses stifles U.S. homes sales – Reuters
• California’s big housing bill tanked. Newsom is partly to blame – Los Angeles Times
• How Do Mortgage Refinances Affect Debt, Default, and Spending? – Harvard Joint Center for Housing Studies

On other countries:

• [Canada] Real estate prices and banking performance: evidence from Canada – Journal of Economics and Finance
• [India] Affordable Housing as Human Right – Yale University
• [Portugal] The impact of Airbnb on residential property values and rents: evidence from Portugal – Ideas
• [United Kingdom] UK housing: Resilient in the face of turmoil – ING

From EconoSpeak:

“The U.K. think tank Autonomy has issued a report calling for much shorter working weeks, “The Ecological Limits of Work: on carbon emissions, carbon budgets and working time,” which is featured in a Guardian article published today, “Much shorter working weeks needed to tackle climate crisis – study.”

People across Europe will need to work drastically fewer hours to avoid disastrous climate heating unless there is a radical decarbonising of the economy, according to a study.

The research, from thinktank Autonomy, shows workers in the UK would need to move to nine-hour weeks to keep the country on track to avoid more than 2C of heating at current carbon intensity levels. Similar reductions were found to be necessary in Sweden and Germany.

The findings are based on OECD and UN data on greenhouse gas emissions per industry in the three countries. It found that at current carbon levels, all three would require a drastic reduction in working hours as well as urgent measures to decarbonise the economy to prevent climate breakdown.

Will Stronge, the director of Autonomy, said the research highlighted the need to include reductions in working hours as part of the efforts to address the climate emergency.”