The Unassuming Economist

Walkways, Not Walls | There are benefits to better connecting macroeconomics with real estate economics | Prakash Loungani 

The Housing Affordability Crunch | A newly developed dataset shows how the pandemic’s aftermath ushered in the worst housing affordability crisis in more than a decade | Deniz Igan 

The True Cost of Living | Sharply higher borrowing costs, especially for housing, fueled a disconnect between inflation statistics and consumer sentiment | Lawrence Summers, Marijn Bolhuis, and Judd Cramer 

China’s Real Estate Challenge | Sliding property prices may presage a painful economic adjustment | Kenneth Rogoff and Yuanchen Yang 

São Paulo Reclaims Its Center | Brazil’s megalopolis combines federal and municipal programs to retrofit buildings in the downtown area | Elizabeth Johnson 

Housing Africa’s Growing Population | Deeper understanding of informality and better use of technology can build more sustainable housing markets | Kecia Rust 

How To Spot Housing Bubbles | Early detection and mitigation can help deflate asset bubbles before they burst | Enrique Martínez García 

Housing Markets and Monetary Policy | Comprehensive, country-specific understanding of housing and mortgage markets can help calibrate monetary policy | Mehdi Benatiya Andaloussi, Nina Biljanovska, and Alessia De Stefani 

Falling Out of Favor | Some countries are turning against foreign buyers as soaring property prices become political | Maria Petrakis 

Hidden Fortunes | How dirty money distorts real estate markets | Chady El Khoury 

Back to Basics | Are housing markets broken? | Hites Ahir  

Picture This | A look at rising housing cost trend | Marta Doroszczyk

From a paper by Iyanuoluwa Fatoba and Adewumi Otonne:

“This study aims to investigate fiscal policy shocks’ impact on Nigeria’s Income Inequality and
Household Poverty. Using the impulse response function and variance decomposition technique
within the Bayesian Vector Autoregressive framework (BVAR), findings from the study show that
from year 2 to 15, a 1% shock to tax revenue (i.e., when taxes are suddenly changed) generates a
reduced average impact of 0.036% on household poverty. In contrast, household poverty increases
with shocks to government expenditure (i.e., when government expenditures are suddenly altered) in
the short run, with an average impact of 0.022%. In other words, household poverty increases in the
short run (years 2 to 4) and decreases in the medium to long run (years 5 to 15) with shocks to
government expenditure. Similarly, the results show that shocks to tax revenue reduce income
inequality (years 2 to11), and it increases the gap between the rich and the poor in the long run (years
12 to 15). Meanwhile, shocks to government expenditure increase the gap between the rich and the
poor in the short to medium run (year 2 to 6) while decreasing the gap in the medium to long run
(year 7 to15). The implication of these findings suggests that shocks to tax revenue directly benefit
low-income families and individuals in Nigeria. Moreover, as unanticipated alteration of government
expenditure increases household poverty and income inequality in the short run to medium run, any
shock to government expenditure (internal or external) should be combated with pro-poor policy
action.”

From a paper by Neha Gupta, Namita Sahay, and Miklesh Prasad Yadav:

“We analyse the asymmetric impact of oil prices on the stock markets of the BRICS nations. Employing the Nonlinear Autoregressive Distributed Lag (NARDL) model, we examine the weekly data spanning from October 29, 2010, to May 28, 2021 for West Texas Intermediate (WTI) spot prices in USD per barrel, alongside stock price data from official stock market indices websites. The findings reveal a substantial long-run association of oil prices with stock markets of BRICS nations except South Africa with significant asymmetry observed in both short and long-term impacts. Specifically, fluctuations in oil prices exhibit divergent effects on stock markets within these nations necessitating nuanced policy responses. Investors and portfolio managers are encouraged to adopt nonlinear models for forecasting and portfolio management leveraging asymmetric effects for risk mitigation strategies. These suggestions underscore the importance of recognizing the nonlinear and asymmetric nature of oil price dynamics in shaping investment decisions and formulating effective policy measures to mitigate associated risks in BRICS stock markets.”

From a paper by Aina B. Aidarova, Aissulu Nurmambekovna Ramashova, Karlygash Baisholanova, Galiya Jaxybekova, Aliy Imanbayev, Indira Kenzhebekova, and Dinmukhamed Kelesbayev:

“In 2001, Jim O’Neil coined the term “BRIC” to refer to the economies of Brazil, Russia, India and China. In 2011, South Africa joined the group, and it was updated to “BRICS.” These countries have a significant impact on the world economy, and there are numerous studies examining their macroeconomic structures. This study focuses on the relationship between economic growth, oil revenues, and inflation levels in BRICS countries from 2000 to 2021 and uses panel cointegration analysis. Many studies showed a relationship between these variables in different countries and unions. This study aims to determine if these relationships hold for BRICS countries. The results suggest a cointegration relation and a causality relation between economic growth, inflation, and oil revenues in BRICS countries. This finding demonstrates the impact of energy, specifically oil revenues, on economic growth. However, other macro indicators also affect economic growth, as suggested by existing literature. Therefore, future studies could improve on this research by including additional social and economic variables to evaluate the impact of oil revenues on economic growth from multiple perspectives.”

From a paper by Jerome Creel, and Jonas Kaiser:

“This paper investigates the stabilization property of fiscal policy by revisiting the notion of
potential output via the use of Okun’s Law including the vacancy-to-unemployment ratio (V/U)
to proxy economic slack. We propose new measures of the US fiscal stance based on observable
data and transparent targets. Our results suggest that the US actually had a more conservative
fiscal stance than official data indicate. This paper also examines fiscal multipliers, which are
larger when V/U, rather than the unemployment rate, is used as measure of economic slack. We
find that state-dependence of fiscal multipliers is as sensitive to thresholds for bad years than
to the slack measure employed in Okun’s Law.”