The Unassuming Economist

From the IMF’s latest report on Myanmar:

“However, the near-term outlook has weakened. Economic growth is expected to remain below potential (…) in 2018/19 due to weakening export demand and subdued private construction activity related to the deleveraging by banks and corporates as real estate prices continue to correct from elevated levels.”

On cross-country:

• Residents’ revenge: how citizens are taking on city developers – Financial Times
• Global Residential Cities Index-Q4 2018 – Knight Frank
• Impact of weak substitution between owning and renting a dwelling on housing market – Journal of Housing and the Built Environment
• A new housing ecosystem: $3.8 trillion under one roof – McKinsey

On the US:

• The Coming Trump Housing Crisis – Wall Street Journal
• Young businesses are more vulnerable to housing market shocks – University of Chicago
• Netflix series hypes the Sunset Strip’s luxury real estate sizzle – Los Angeles Times
• Senate Confirms Trump Pick to Lead Housing-Finance Overhaul – Wall Street Journal
• The Political Battle Over California’s Suburban Dream – Citylab
• Housing Sentiment Surges Just in Time for Spring Homebuying Season – Fannie Mae
• Slowing U.S. Housing Sector Still Shaped by Great Recession – Federal Reserve Bank of St. Louis
• The Rise of the Radical Suburbs – Architect
• Chipping Away at the Mortgage Deduction – Wall Street Journal

On other countries:

• [Canada] Chinese Real-Estate Investors Wary of Vancouver Head to Toronto – Bloomberg
• [Canada] Canadian Home Building Rebounds From Deep Freeze: Housing Update – Bloomberg
• [China] China’s Easing of Residency Requirements Could Boost Cooling Property Market – Bloomberg
• [Czech Republic] Czech Republic’s housing structure – ING
• [Germany] Housing for the People – Jacobin
• [Hong Kong] Hong Kong plans to house 1 million people on artificial islands – World Economic Forum
• [Lithuania] Lithuania’s modest house price rises – Global Property Guide
• [Netherlands] ING: Expats and foreign students raise Amsterdam house prices – ING
• [Romania] Romania’s housing market cooling – Global Property Guide
• [Spain] Spain’s housing market continues to grow stronger – Global Property Guide
• [South Africa] Johannesburg’s hipster gentrification project is at risk of crumbling – Quartz
• [Sweden] Sweden’s house price boom is officially over – Global Property Guide
• [United Kingdom] Construction Sector: Modernisation and Sustainable Housing Supply – UK Parliament
• [United Kingdom] HBF Policy Conference 2019: ‘Confronting the housing crisis’, John Stewart memorial presentation – London School of Economics

From a new INCLUDE report:

“While most African countries have registered high economic growth, a large number of people remain excluded from the benefits of this progress. INCLUDE envisages that inclusive development aims to reduce poverty, both in income and non-income dimensions, and inequality, through improved redistribution on these dimensions. Inclusive development is increasingly recognized as a must, since inequality is rising and the evidence base of the detrimental effect of high levels of inequality on economic growth and social and political stability is increasing. INCLUDE identified six policy domains that are key to reduce poverty and inequality:

• Economic growth with structural transformation of the economy.
• Productive employment; i.e. more jobs with good working conditions, remuneration and stability.
• Social protection for resilience, poverty reduction and sustainable economic growth.
• The provision of basic services (education, health, finance, infrastructure, housing, water, etc.).
• Territorial development and spatial equity (e.g. between rural and urban areas).
• Quality and inclusive governance, especially for poor minorities and other marginalized groups.

These policy domains are clearly interlinked and it is important to identify and empower strategic actors for effective and inclusive design and implementation of policies. Working with strategic actors and investing in these policy domains is however not sufficient. To move beyond pro-poor and pro-growth approaches towards inclusive approaches with more inclusive outcomes requires the consideration of three key areas:

• Equality: besides absolute improvements, policymakers should consider the distributional consequences of their policy choices. Evaluation mechanisms should therefore recognize the added
  value of reducing inequality.
• Diversity: considering distributional consequences helps to understand the heterogeneity in access to an realization of development outcomes. To move beyond the mere recognition of heterogeneity towards inclusive action, policymakers are encouraged to develop integrated policies where interventions complement each other to not only create improvements on average, but to also decrease inequality, even if this creates an ‘extra mile needed to reach the more difficult to reach.
• Context: to move beyond one-size-fits-all solutions, policies need to be aligned with local or regional contexts. Policies that fail to integrate with horizontal and vertical policy frameworks, and fail to identify and include strategic actors, are likely to promote exclusion rather than inclusion. “

A new paper “revisits the old standing issue of the stability of labour shares. […] Empirical results indicate diverse patterns in labour share movements, the most preponderant being a downward deterministic trend with break(s). Upward trends are observed in a limited set of economies (Belgium, Luxembourg and the Netherlands).  Overall, the stability of the labour share hypothesis appears to find only weak support. Exploratory analysis demonstrates that most of the structural breaks are economically significant and relate to the recent economic and political history of individual economies. The nature of labour share dynamics, as a country-specific and (to a large extent) policy and political phenomenon, is emphasized.”

From a VoxEU post by Ricardo Perez-Truglia:

“Tax records became easily accessible online in Norway in 2001, allowing everyone in the country to observe the incomes of everyone else. This column offers evidence that people primarily went online to snoop on the incomes of friends, relatives, and other contacts. This game of income comparisons negatively affected the wellbeing of poorer Norwegians while at the same time boosting the self-esteem of the rich.

Technological advances have made it possible for everyone to know potentially everything about everyone else. Sci-fi shows such as Netflix’s Black Mirror imagine dystopian scenarios that could result from these new technologies. In the real world, social media is already allowing individuals to disclose details about their personal lives with strangers. This technological change has sparked a policy debate too: should governments disclose data such as tax records?

Tax transparency in Norway

To understand how far reaching the societal consequences of transparency could be, it is useful to look at the experience of one of the pioneers of transparency, namely, Norway. Tax records have been public in Norway since the 19th century, but they have not always been easily accessible. Before 2001, an individual had to make a formal request in person at a tax agency to see someone else’s income. In the fall of 2001, the Norwegian media digitised tax records and created websites that allowed any individual with internet access to search the entire country’s tax records easily and effortlessly. Every Norwegian could find out the incomes of anyone else in the country in a matter of seconds.

In the following decade, Norwegians engaged in a heated debate about whether tax records should be easily accessible online. A similar debate took place in neighbouring Sweden, Iceland, and Finland. These other Scandinavian countries also had laws making tax records public, and thus had to decide whether to make them easily available online as in Norway.

There was no consensus among politicians or the general public on whether Norway’s transparency was good or bad. At its core, the disagreement was about what the effects of transparency actually are. Some supporters argued that public records could serve to deter corrupt politicians and tax evaders (Bø et al. 2015). Meanwhile, detractors claimed that the tax records would be used in objectionable ways, to snoop on the incomes of friends, for example. Thus far, only qualitative and anecdotal evidence has substantiated this contention. In a recent paper (Perez-Truglia 2019), I provide the first quantitative evidence on the matter.

Figure 1 shows a screenshot of one of the websites that allowed Norwegians to browse the tax records. These websites were easy to use and became incredibly popular in the country for the following decade. ”

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