The Unassuming Economist

An interesting paper by Jan Brůha and Jiří Polanský on labor markets and business cycles:

“The goal of this paper is to document and summarize the main cyclical features of labor market macroeconomic data in advanced countries. We report the second moments (correlations, coherences and volatility) of labor market variables for various data transformations (growth rates and cycles). Then we use dynamic factor models to inquire about the number of orthogonal shocks that drives labor market data dynamics. We also investigate the time-varying nature of these features: we ask whether they are stable over time, especially at times of severe crises such as the Great Recession. Finally, we compare these features across countries to see whether there are groups of countries characterized by similar features, such as labor market institutions. We find that certain features are stable over time and across countries (such as Okun’s Law), while others are not. We also confirm that labor market institutions influence selected characteristics, but to a limited degree only. We find that one or at most two orthogonal shocks seem to drive the cyclical dynamics of labor market variables in most countries. The paper concludes with our interpretation of these findings for structural macroeconomic models”

From an ILO paper by Antonia Asenjo and Clemente Pignatti:

“We conduct a comparative analysis of unemployment insurance (UI) schemes in advanced and emerging economies. We find that almost all countries complement UI with severance payments, although emerging (advanced) economies rely relatively more on severance payments (UI). As a result, UI coverage rates are substantially higher in advanced than emerging economies. We also find that most countries finance their UI collectively (i.e. by workers, employers and the government), but contribution rates are higher in advanced than emerging economies. Turning to entitlement conditions, UI schemes are generally accessible only by dependent employees and formal sector workers and the stringency of qualifying conditions is similar in advanced and emerging economies. We also find that unemployment benefit generosity (i.e. in terms of both benefit level and duration) is higher in advanced than emerging economies. Finally, the integration of active measures within UI schemes is observed across most emerging and advanced economies. However, emerging economies present weaker job-search requirements but stronger sanctions for job refusal compared to advanced economies.”

On the US:

• Foreclosures Can Amplify Downward Spirals of House Prices – NBER
• MoNK: Mortgages in a New-Keynesian Model – NBER
• Big Cities Are Taking on Housing Affordability, but Even the Largest Will Need Help – Harvard Joint Center for Housing Studies
• Land-Use Regulation and the Intensive Margin of Housing Supply – Journal of Urban Economics
• Is zoning a useful tool or a regulatory barrier? – Brookings
• Apple to donate $2.5 billion to combat California housing crisis – CBS
• Cities need housing. Churches have property. Can they work something out? – Washington Post
• China’s Housing Market Is Finally Cooling. Some Homeowners Are Furious. – Wall Street Journal
• Why $4.5 Billion From Big Tech Won’t End California Housing Crisis – New York Times
• How California Became America’s Housing Market Nightmare – Bloomberg

On other countries:

• [United Kingdom] Redesigning Housing Policy – National Institute Economic Review

An interesting new blogpost by Andrew Batson on the Nobel Prize in Economics and China:

“The awarding of the Nobel Prize in economics to three academics “for their experimental approach to alleviating global poverty” has prompted some caustic commentary about how much, or little, global poverty has actually been reduced by the highly targeted, small-scale policy interventions evaluated by such experiments.

It’s well known that most of the reduction in global poverty in recent decades, however it is measured, is accounted for by rapid economic growth in big Asian economies. On the World Bank’s numbers, China alone accounts for about 60% of the decline in the number of people living in extreme poverty worldwide (China’s poor population declined by 742 million people, while the world’s declined by 1.16 billion people).

The contribution of randomized controlled trials to China’s poverty reduction has been, to a first approximation, zero. Yao Yang, the dean of the National School of Development at Peking University, wrote in an English-language op-ed that “Experiments might help policymakers improve existing welfare programs or lay the foundation for new ones, but they cannot tell a poor country how to achieve sustained growth.” In a similar vein, Harvard professor Dani Rodrik tweeted: “Remarkable how little today’s development economics has to say about the most impressive poverty reduction in history ever.”

On cross-country:

• Building Urban Resilience: An Evaluation of the World Bank Group’s Evolving Experience (2007-2017) – World Bank

On the US:

• Book Reviews: Two Histories of Financiers Profiting From Real Estate While Homeowners Go Belly Up – New York Times
• Minneapolis Saw That NIMBYism Has Victims – The Atlantic
• Business’s Growing Role In Confronting The Housing Crisis – Forbes

On other countries:

• [Canada] A New Twist on Vancouver’s Skyline – New York Times
• [China] China Now Has An Answer To Its Housing Crisis – It’s Called Rent – Forbes
• [Denmark] Blackstone Promises Supply Amid Risk of Danish Rent Controls – Bloomberg