The Unassuming Economist

Excerpts from the National Bureau of Economic Research’s (NBER) recent working paper (2021) by authors Jacob Greenspon and Lawrence H. Summers of the Harvard Kennedy School of Government and Anna M. Stansbury of MIT Sloan School of Management:

“We study the productivity-pay relationship in the United States and Canada along two dimensions. The first is divergence: the degree to which the levels of productivity and pay have diverged. The second is delinkage: the degree to which incremental increases in the rate of productivity growth translate into incremental increases in the rate of growth of pay, holding all else equal. We show that in both countries the pay of typical workers has diverged substantially from average labor productivity over recent decades, driven by both rising labor income inequality and a declining labor share of income. Even as the levels of productivity and pay have grown further apart, we find evidence for some linkage between productivity and pay in both countries: a one percentage point increase in the rate of productivity growth is associated with a positive increase in the rate of pay growth, holding all else equal. This linkage appears stronger in the US than in Canada. Overall, our findings lead us to tentatively conclude that policies or trends which lead to incremental increases in productivity growth, particularly in large relatively closed economies like the USA, will tend to raise middle-class incomes. At the same time, other factors orthogonal to productivity growth have been driving productivity and typical pay further apart, emphasizing that much of the evolution in middle-class living standards will depend on measures bearing on relative incomes.”

Click here to read the full paper.

*Note that this post will be updated as links to papers and presentations become available. Last updated: January 9, 2022.

On Covid-19 and health

• Can Stay-at-Home Orders Create a Pandemic Housing Boom? – Paper and Presentation
• How Resilient is Mortgage Credit Supply? Evidence from the COVID-19 Pandemic – Paper and Presentation
• COVID-19, Housing Prices and Macroprudential Policies – Paper and Presentation
• Flattening the Curve: Pandemic-Induced Revaluation of Urban Real Estate – Paper and Presentation 
• The Impact of the Coronavirus Pandemic on New York City Real Estate: First Evidence – Paper and Presentation
• Living On My Own: The Impact of an Epidemic on Housing Preferences – Paper and Presentation
• Cleanliness is Next to Income: The Impact of COVID-19 on Short-Term Rentals – Paper and Presentation
• The Impact of Medicaid Expansion on Those Lacking Housing Basics, 2010-19 – Paper and Presentation
• Marital Transitions, Housing, and Long-Term Care in Old Age – Paper and Presentation
• Stuck at Home: Housing Demand During the COVID-19 Pandemic – Paper and Presentation 
• Housing as a Human Right: Alternative Institutional Structures and Covid-19 – Paper and Presentation
• Racial Heterogeneity in Mortgage Outcomes During the COVID-19 Pandemic – Paper and Presentation
• COVID-19 Rental Eviction Moratoria and Household Well-Being – Paper and Presentation
• Impact of COVID-19 on Residential Real Estate – Paper and Presentation
• The Effects of Free Housing on Children’s Health and Healthcare Use – Paper and Presentation
• Health Implications of Housing Programs: Evidence from a Population-Wide Weatherization Program – Paper and Presentation 
• The Health Consequence of Rising Housing Prices in China – Paper and Presentation 

On house prices

• Internal Migration and House Prices in Australia – Paper and Presentation
• Old Age Savings and House Price Shocks – Paper and Presentation       
• The Economic Burden of Pension Shortfalls: Evidence from House Prices – Paper and Presentation
• The Effect of School Redistricting on Housing Markets – Paper and Presentation
• Match Quality and House Price Dispersion: Evidence from Norwegian Housing Auctions – Paper and Presentation
• The Effect of School Redistricting on Neighborhood Sorting and House Prices – Paper and Presentation   
• House Prices, Investors, and Credit in the Great Housing Bust  – Paper and Presentation 
• House Price Contagion and United States City Migration Networks – Paper and Presentation 
• Housing Market Segmentation – Paper and Presentation 
• House Prices, Home Equity, and Entrepreneurship: Evidence from U.S. Census Micro Data – Paper and Presentation
• What Do Hedonic House Price Estimates Tell Us When CAP Rates Vary? – Paper and Presentation

On mortgage market

• Reinforcement Learning for Household Finance: Designing Optimal Policy for Mortgage Market – Paper and Presentation
• Reluctant Savers and Mortgage Subsidies – Paper and Presentation
• The Consumption Response to Borrowing Constraints in the Mortgage Market – Paper and Presentation
• The Industry Expertise Channel of Mortgage Lending – Paper and Presentation
• Can Time‐Varying Risk Premia and Household Heterogeneity Explain Credit Cycles? – Paper and Presentation
• Mortgage Pricing and Monetary Policy – Paper and Presentation
• Appraisal Inflation and Private Mortgage Securitization – Paper and Presentation
• Opioid Epidemic and Mortgage Default – Paper and Presentation
• The Impact of Interest Rate Declines on Distressed Borrowers: Evidence from the 2000s Housing Bust – Paper and Presentation
• The Mortgage Piggy Bank: Building Wealth through Amortization – Paper and Presentation
• Mortgage Delinquency and Default: A Tale of Two Options – Paper and Presentation
• Is There Crowd-Out in Mortgage Refinance? – Paper and Presentation
• Do Mortgage Lenders Compete Locally? Implications for Credit Access – Paper and Presentation
• How Costly is Noise? Data and Disparities in the United States Mortgage Market – Paper and Presentation

On rental market

• Are Housing Rental Markets that Competitive? A Dynamic Monopoly Approach – Paper and Presentation
• Objectified Housing Sales and Rent Prices in Representative Household Surveys: the Impact on Macroeconomic Statistics – Paper and Presentation
• Eviction Risk of Rental Housing: Does It Matter How Your Landlord Finances the Property? – Paper and Presentation
• Macroeconomic Statistics based on Surveys: Circumventing Subjectivity in Housing Sales and Rent Data – Paper and Presentation
• Late Payment Fees and Nonpayment in Rental Markets, and Implications for Inflation Measurement: Theoretical Considerations and Evidence – Paper and Presentation

On inequality

• Land Prices and the Persistent Effects of Wealth Inequality – Paper and Presentation
• Racial Disparities in Housing Returns – Paper and Presentation 
• Housing Market Channels of Segregation – Paper and Presentation
• Using High Frequency Evaluations to Estimate Discrimination: Evidence from Mortgage Loan Officers – Paper and Presentation
• Boomtowns: Local Shocks and Inequality in 1920s California – Paper and Presentation
• Do Credit Policies Affect Racial Groups Differently? Evidence from the Mortgage Market – Paper and Presentation 
• The Impact of Federal Housing Policies on Racial Inequality – Paper and Presentation 
• A Field Experiment on Racial Discrimination in the Rental Housing Market of Hawaii – Paper and Presentation 
• The Intergenerational Transmission of Housing Wealth – Paper and Presentation 
• The Impact of Federal Housing Policies on Racial Inequality – Paper and Presentation

On climate change and natural disasters

• Tsunami Risk and Information Shocks: Evidence from the Oregon Housing Market – Paper and Presentation
• Mortgage Markets with Climate-Change Risk: Evidence from Wildfires in California – Paper and Presentation
• Who Benefits from Water Quality Control? The Unequal Impacts of Environmental Regulation on Housing Wealth and Consumption – Paper and Presentation
• Peer Effects in Residential Green Infrastructure Adoption – Paper and Presentation

On housing supply and affordability

• Why Are More Young Adults Living With Their Parents? A role for housing affordability – Paper and Presentation
• How to Reduce Housing Costs? Understanding Local Deterrents to Building Multi-Family Housing – Paper and Presentation
• How to Build Affordable Housing? The Role of Local Barriers to Building Multi-Unit Housing – Paper and Presentation
• Reclaiming Local Control: School Finance Reforms and Housing Supply Restrictions – Paper and Presentation
• Sorting into Neighborhoods: The Role of Minimum Lot Sizes – Paper and Presentation
• Student Housing, Gentrification and Affordability: The US context – Paper and Presentation

On other papers

• The Long-Run Effects of Low-Income Housing on Neighborhood Composition – Paper and Presentation 
• The Housing Phillips Curve – Paper and Presentation 
• Who’s Right, Weber or Glaeser? – Paper and Presentation
• Estimating Housing Rent Depreciation for Inflation Adjustments – Paper and Presentation
• Housing Exclusion in Westchester County, NY – Paper and Presentation
• Who Gains from Housing Market Stimulus? Evidence from Housing Assistance Grants with Threshold Prices – Paper and Presentation
• Overconfidence and Personal Bankruptcy: Evidence from Mispricing in Singapore’s Private Housing Markets – Paper and Presentation 
• Heirs’ Property in an Urban Context – Paper and Presentation 
• Price Diffusion across International Private Commercial Real Estate Markets – Paper and Presentation 
• Corporate Real Estate Holdings, Firm Value, and Returns: Evidence from a Dynamic Partial Adjustment Model – Paper and Presentation 
• Retirement, Housing Mobility, Downsizing and Neighbourhood Quality-A Causal Investigation – Paper and Presentation 
• The Value of School Social Climate Information: Evidence from Chicago Housing Transactions – Paper and Presentation
• The Impact of Public Housing on Student Academic Outcomes – Paper and Presentation
• Does Airbnb Reduce Matching Frictions in the Housing Market? – Paper and Presentation
• The Nexus between Fuel, Income, and Housing Poverty: Evidence from Egypt – Paper and Presentation
• What Determines the Success of Housing Mobility Programs? – Paper and Presentation
• Mandatory Pension Saving and Homeownership – Paper and Presentation 
• Dynastic Home Equity – Paper and Presentation 
• The Amenity Effects of Low-Income Housing Development – Paper and Presentation 
• Decoupling Homes and Schools: Assessing the Impact of Forced School Choice on Residential Change – Paper and Presentation 
• Does Financial Distress Affect Workers’ Productivity? Evidence from Real Estate Agents – Paper and Presentation 
• Impact of Institutional Investors on Real Estate Risk – Paper and Presentation 
• Tax Subsidies and the Cost of Homeownership: Evidence from the Tax Cuts and Jobs Act – Paper and Presentation 
• New Listing Alert: Alternative Theory of Housing Search – Paper and Presentation
• Zero Price Effect and Consumer Welfare: Evidence from Online Classified Home Service – Paper and Presentation
• Breaking the Commitment Device: The Effect of Home Equity Withdrawal on Consumption, Saving, and Welfare – Paper and Presentation 

Ahead of December 3rd, 2021 that marked the international day of disabilities, the World Bank Group released its regional report titled, ‘Disability-Inclusion in Latin America and the Caribbean: A Path to Sustainable Development’, calling for the inclusion of nearly 85 million disabled persons, making up 14.7% of the entire population of the world today.

The report quantifies the magnitude of the problem by taking a life-cycle approach. It sheds light on the disappointing fact that nearly 15% of specially-abled children are not able to access education in the world, and even among those who do- dropouts are increasingly the norm. Besides, there is the added burden of social stigma preventing parents from sending children to school, and the segregation that happens in classrooms. Later in life, it has been observed that nearly 1 in every 2 heads of households who live with a disability do not participate in the labor market, thus depressing incomes and future prospects of later generations. The report also deliberates upon the compounding factor with which such deprivations get exacerbated, such as racial and religious differences especially for Africans, Latinos, and people from the Caribbean.

Delving deeper into the prevalence of discrimination in public spaces, jobs, educational opportunities, and other social events, the report goes on to discuss measures to combat such problems such as the use of data to design better-targeted policies, increased participation of the disabled in policymaking procedures, the government’s role in improving access to facilities and public goods, etc.

Click here to read the full blog and access the executive summary of the report.

In a recent piece (2021), researchers at McKinsey & Company discuss the merits of a data-based approach to food security by tailoring nutritional offerings, and how building out partner networks can help payers realize the potential of food-support programs. They elaborate upon some of the recently adopted nutrition benefit programs by payers in the USA that have helped the society overcome major medical bumps, helped payers retain members and reduce costs.

The article then discusses some of the barriers to scaling up adoption of such nutritional benefit programs, including issues the need for accurate need assessment, designing proper interventions, forging stakeholder partnerships, and measuring and precise reporting of outcomes of the rolled out intervention properly to ensure ease of replication of a similar program elsewhere. On similar lines, it provides insights on how policymakers can overcome each of these barriers for improving health outcomes of the vulnerable communities, besides realizing tremendous social benefit in the form of reduced care costs.

Click here to read the full article.

On cross-country:

• Some Economics of Place Effects – Conversable Economist
• A Convenient Representation of the Wealth Distribution and More Evidence on Homeownership and Wealth Inequality in Euro Area Countries – IZA

On the US:   

• Fannie Mae, Freddie Mac to Back Home Loans of Nearly $1 Million. The maximum size of home-mortgage loans eligible for government backing will jump to $970,800 next year in high-cost markets – Wall Street Journal
• US lifts upper limit on government-backed home mortgages to almost $1m. Value of mortgages for purchase by Fannie Mae and Freddie Mac rises 18% after ‘exceptionally fast’ price increase – FT
• Supply-Chain Woes Snarl Attempts to Tame House Prices.Rising costs of construction materials, labor shortages complicate efforts to cool some of the world’s hottest property markets – Wall Street Journal
• The Housing Gang Is Getting Back Together for Another Bust. Fan and Fred will buy mortgages up to $1 million, repeating the mistakes that led to the 2008 crash. – Wall Street Journal
• Renters strike back as cities cap price hikes by landlords.The revival of rent control policies long derided by economists, including one of President Joe Biden’s top advisers, comes as officials scramble to contain rising prices across a range of goods and services. – Politico
• Racial Discrimination and Housing Outcomes in the United States Rental Market – NBER
• Have More People Moved During the Pandemic? – Harvard Joint Center for Housing Studies
• An Economy That Works for All: Fostering Low-Income Homeownership – New York Fed
• Individual and Local Effects of Unemployment on Mortgage Defaults – Philadelphia Fed
• Austin’s Texas-Size Luxury Housing Boom. The capital city has one of the hottest high-end real-estate markets in the country, with entry-level list prices for the top 5% of the market hitting $2.34 million in 2021, a rise of nearly 33% over 2020 prices – Wall Street Journal
• Individual and Local Effects of Unemployment on Mortgage Defaults – Philadelphia Fed

On China

• China Home Sales Slump Deepens as Easing Shows Little Effect – Bloomberg
• China Evergrande’s electric-vehicle unit gets US$200 million from returning undeveloped land.The Hong Kong-listed carmaker says the money will be used to fund construction projects and pay wages. Its cash-strapped parent, China Evergrande, is hoping to transform its business focus from property development to car manufacturing – South China Morning Post
• China property bond fears remain as house prices fall. Evergrande’s missed payments have led to a reckoning across the country’s real estate industry – FT
• Even in tech hub Shenzhen, China’s property market succumbs to chills – Reuters

On other countries:  

• [Canada] Want to solve the housing crisis? Address super-charged demand – The Conversation  
• [Czech Republic] Czech central bank gets tougher in mortgage lending rules amid property boom – Reuters
• [Germany] German banks vulnerable to housing bubble; should build buffers: Bundesbank – Reuters
• [Germany] Price rises in German housing market to ease but affordability worsen – Reuters
• [Hong Kong] Hong Kong home prices ease for 2nd month after record high – Reuters
• [Ireland] Irish house prices undervalued? Shows how misleading stats can be. European Commission report saying houses undervalued relies on outmoded statistics – The Irish Times
• [United Kingdom] Surge in stamp duty refunds on second-home surcharge. Property stock levels decline during the pandemic, say agents – FT
• [United Kingdom] The big picture: the decline and fall of a utopian social housing scheme – The Guardian
• [United Kingdom] London Housing Market Poised to Lag Behind U.K. Regions in 2022 – Bloomberg