The Unassuming Economist

On cross-country:

• Global Rent Price Index: 1, 5 & 10 Year Changes by Country – Global Property Guide
• How the EU should tackle the housing crisis. – Social Europe

Working papers and conferences:

• Housing and Macroprudential Policy – University of Oxford
• Nonpayment and Eviction in the Rental Housing Market – NBER
• The Incidence of Rent Subsidies: Evidence on Rents, Housing Choices and Supply – CESifo
• The role of housing market and credit on household consumption dynamics: Evidence from the OECD countries – Journal of Economic Behavior & Organization
• Finding Home When Disaster Strikes: Dust Bowl Migration and Housing in Los Angeles – SSRN
• Bargaining Outcomes of Housing Investors Across Diverse Neighborhoods – SSRN

On the US—developments on house prices, rent, permits and mortgage:    

• Single-Family Permits Higher in September 2024 – NAHB
• Part 2: Current State of the Housing Market; Overview for mid-November 2024 – Calculated Risk
• Lawler: Early Read on Existing Home Sales in October. First Year-over-year gain in Existing Home Sales since August 2021 – Calculated Risk
• Powell May Be Waiting Until 2026 for Housing Inflation to Cool. Cleveland Fed model suggests CPI metric will stay elevated. Optics of high inflation make it hard to cut rates: economist – Bloomberg
• October 2024 Hottest Housing Markets – Realtor.com
• Examining Recent Patterns in Residential Building Permits – St. Louis Fed
• Builder Confidence Moves Higher as Election Uncertainty is Lifted – NAHB 
• 3rd Look at Local Housing Markets in October. First Year-over-year Sales Gain Since August 2021 – Calculated Risk
• Residential Mortgages Experience Unchanged Lending Conditions, Weaker Demand in Third Quarter – NAHB
• Housing Starts Decreased to 1.311 million Annual Rate in October – Calculated Risk  
• US single-family housing starts tumble in October – Reuters
• Higher Mortgage Interest Rates Slow Housing Production in October – NAHB
• Gains for Townhouse Construction – NAHB
• The upcoming housing battle that could roil mortgage costs even more. The first Trump administration tried to remove two mortgage giants, Fannie Mae and Freddie Mac, from government control. The second one might finish the job. – Washington Post
• California Home Sales Up 9.5% SA YoY in October. Look for First Year-over-year National Existing Home Sales Gain Since August 2021 – Calculated Risk
• Growth for Single-Family Built-for-Rent Construction – NAHB
• New-Construction Activity Continues To Cool in October – Realtor.com
• Low-Rise Multifamily and Housing Supply: A Case Study of Seattle – AEI 
• Mortgage rates are up. That’s a big problem for Trump. High housing costs have become part of the economic “vibes” that people see on a regular basis. – Washington Post
• Flat Conditions for Custom Home Building – NAHB
• Economic Developments – November 2024. Weaker Home Sales Expected as Interest Rates Rise – Fannie Mae

On the US—other developments:    

• Five Innovations that Could Upend the Housing Market. Don’t overlook technology’s role in shaping housing demand–and supply. Here are five technologies that will make a difference. – Home Economics
• America’s Homes Are Piggy Banks That Few People Can Afford to Raid. Only a minority of mainly older homeowners are in a position to take advantage of the historic run-up in house prices – Wall Street Journal
• What Trump’s Win Could Mean for Housing – Time
• To Save More Water, American Homes Need Smaller Pipes. Most of the plumbing pipes in the United States are oversize, wasting water in a time of increasing drought. – New York Times
• An Affordable Housing Project Faced a Huge Backlash. It Won Anyway. A developer wanted to replace parking garages with affordable apartments in Manhattan, but some residents on the Upper West Side resisted. Here’s why the housing won. – New York Times
• Homeownership’s Promise and Pitfalls in Transferring Wealth Across Generations. The “Great Wealth Transfer” is set to lock-in extreme class stratification absent housing policy reform. – Inequality.org
• Zillow’s real-time affordability tool helps shoppers quickly find homes within their budget – Zillow 
• To Get the Housing Market Moving, Raise Property Taxes. A recent paper compares California and Texas to suggest a novel approach to improving homeownership for young families. It’s an idea that can’t be ignored. – Bloomberg
• Will Doug Burgum Be Donald Trump’s Housing Czar? Plus: Democrats’ housing-lite postelection recriminations and yet another ballot box defeat for pro–rent control forces in California. – Reason
• Two Apartment Buildings Were Planned. Only One Went Up. What Happened? – New York Times
• Families Need Affordable Housing, but New York Residents Use Red Tape To Block Development. With the help of New York’s environmental review law, local NIMBYs halted an approved housing project, adding to delays and costs in a city facing a housing shortage. – Reason 
• Families Must Spend 38% of Their Income on House Payments – NAHB

On China:

• Amid property crisis, China must shift from ‘availability’ to ‘quality’, premier urges. Latest comments show how China’s leadership aims to ‘leverage technology’ and embrace modern advancements to fuel urbanisation drive and boost economy – South China Morning Post

On Australia and New Zealand:

• [Australia] Clare O’Neil on Labor’s plan to fix the housing crisis – The Guardian
• [Australia] The Sydney suburbs where home buyers pay top dollar for tiny blocks – The Guardian
• [Australia] ‘Basically impossible’: Housing affordability is the worst on record – The Sydney Morning Herald

On other countries:  

• [Canada] Canadian housing starts rise 8% in October – Reuters
• [Germany] Germany’s Residential Property Market Analysis 2024 – Global Property Guide
• [India] Top Indian Cities Post 23% Jump in House Prices, Consultant Says – Bloomberg
• [Ireland] Irish house prices continue to rise at annual rate of 10%. Latest figures indicate prices in Dublin rose at annual rate of 10.8% in year to September, now up 154.5% since early 2012 – The Irish Times
• [Poland] Poland’s Residential Property Market Analysis 2024 – Global Property Guide
• [Singapore] Singapore Home Sales Reach 11-Month High as Demand Returns – Bloomberg
• [Spain] The Spanish real estate market in 2024-2025: in expansive mode – CaixaBank
• [Sweden] Sweden’s Residential Real Estate Market Analysis 2024 – Global Property Guide
• [Taiwan] Taiwan’s Residential Real Estate Market Analysis 2024 – Global Property Guide
• [United Kingdom] Houses in national parks in England and Wales sell for 25% more, study finds. Nationwide says New Forest is most expensive national park with an average property price of £576,000 – The Guardian
• [United Kingdom] New housing developments forcing people to rely on cars. Major new study shows car dependency of new homes has increased in every region of England outside of London over the last 15 years – New Economics Foundation
• [United Kingdom] Asking prices for UK homes show big November dip but 2025 set for gains, Rightmove says – Reuters
• [United Kingdom] UK Rental Inflation Picks Up for First Time in Seven Months. Double-digit rise in rents in London in fresh blow for tenants. Housing costs are still exerting a cost-of-living squeeze – Bloomberg

From a paper by Pande Nyoman Laksmi Kusumawati, J. Paul Elhorst and Jakob de Haan:

“In the last decade, inclusive growth, a broader concept of economic growth came into vogue among international organizations and countries’ policy makers. This paper reviews recent studies on inclusive growth addressing the following issues: which indicators have been considered, how they have been combined, and to which extent can existing research on inclusive growth provide a better understanding of the economic development process in an emerging economy like Indonesia. Many studies use one index and a single-equation approach to measure the determinants of inclusive growth. This paper suggests an alternative approach for future research that can shed more light on (the drivers of) (the different components of) inclusive growth, i.e. using a simultaneous equations model or a structural equation modelling approach. We can, thereby, provide better analyses and policy recommendations to achieve inclusive growth.”

Four years ago, at the World Economic Forum in Davos, IMF Managing Director Christine Lagarde warned of the dangers of rising inequality, a topic that has now risen to the very top of the global policy agenda.

While the IMF’s work on inequality has attracted the most attention, it is one of several new areas into which the institution has branched out in recent years. A unifying framework for all this work can be summarized in two words: Inclusive growth. 

We want growth, but we also want to make sure:

• that people have jobs—this is the basis for people to feel included in society and to have a sense of dignity;
• that women and men have equal opportunities to participate in the economy—hence our focus on gender;
• that the poor and the middle class share in the prosperity of a country—hence the work on inequality and shared prosperity;
• that, as happens, for instance when countries discover natural resources, wealth is not captured by a few—this is why we worry about corruption and governance;
• that there is financial inclusion—which makes a difference in investment, food security and health outcomes; and
• that growth is shared just not among this generation but with future generations—hence our work on building resilience to climate change and natural disasters.

In short, a common thread through all our initiatives is that they seek to promote inclusion—an opportunity for everyone to make a better life for themselves.

These are not just fancy words; a click on any of the links above shows how the IMF is making work on inclusion a part of its daily operations.

Inclusion is important, but so of course is growth. “A larger slice of the pie for everyone calls for a bigger pie” (Lipton, 2016). So when we push for inclusive growth, we are not advocating as role models either the former Soviet Union or present day North Korea—those are examples of ‘inclusive misery,’ not inclusive growth. Understanding the sources of productivity and long-run growth—and the structural policies needed to deliver growth—thus remains an important part of the IMF’s agenda.

Globalization and inclusion

The IMF was set up to foster international cooperation. Hence, to us, inclusion refers not just to the sharing of prosperity within a country, but to the sharing of prosperity among all the countries of the world. International trade, capital flows, and migration are the channels through which this can come about. This is why we stand firmly in favor of globalization, while recognizing that there is discontent with some of its effects and that much more could be done to share the prosperity it generates.

Higher growth should help address some of the discontent, as argued by Harvard economist Benjamin Friedman in his book, The Moral Consequences of Economic Growth. Friedman shows that, over the long sweep of history, strong growth by “the broad bulk” of a society’s citizens is associated with greater tolerance in attitudes towards immigrants, better provision for the disadvantaged in society, and strengthening of democratic institutions.

However, designing policies so they deliver inclusive growth in the first place will be a more durable response than leaving matters to the trickle-down effects of growth.

Policies for inclusive growth

♦  Trampolines and safety nets: “More inclusive economic growth demands policies that address the needs of those who lose out … Otherwise our political problems will only deepen” (Lipton, 2016). Trampoline policies such as job counseling and retraining allow workers to bounce back from job loss: they help people adjust faster when economic shocks occur, reduce long unemployment spells and hence keep the skills of workers from depreciating. While such programs which already exist in many advanced economies, they deserve further study so that all can benefit from best practice. Safety net programs have a role to play too. Governments can offer wage insurance for workers displaced into lower-paying jobs and offer employers wage subsidies for hiring displaced workers. Programs such as the U.S. earned income tax credit should be extended to further narrow income gaps while encouraging people to work (Obstfeld, 2016).

♦  Broader sharing of the benefits of the financial sector and financial globalization: We need “a financial system that is both more ethical and oriented more to the needs of the real economy—a financial system that serves society and not the other way round” (Lagarde, 2015). Policies that broaden access to finance for the poor and middle class are needed to help them garner the benefits of foreign flows of capital. Increased capital mobility across borders has often fueled international tax competition and deprived governments of revenues (a “race to the bottom leaves everyone at the bottom,” (Lagarde, 2014). The lower revenue makes it harder for governments to finance trampoline policies and safety nets without inordinately high taxes on labor or regressive consumption taxes. Hence, we need international coordination against tax avoidance to prevent the bulk of globalization gains from accruing disproportionately to capital (Obstfeld, 2016).

♦  ‘Pre-distribution’ and redistribution: Over the long haul, polices that improve access to good education and health care for all classes of society are needed to provide better equality of opportunity. However, this is neither very easy nor an overnight fix. Hence, in the short run, ‘pre-distribution’ policies need to be complemented by redistribution: “more progressive tax and transfer policies must play a role in spreading globalization’s economic benefits more broadly” (Obstfeld, 2016).

From The Statesman:

“Lamenting the fact that the global growth rate at just over 3 per cent is the lowest since the turn of the century when an average of nearly 4 per cent prevailed till COVID pandemic, the G20 Troika of Brazil, India and South Africa on Wednesday observed that accelerating progress towards sustainable development goals (SDGs) requires inclusive digital transformation.

”Technology (also) is moving at dizzying pace, and if equitably deployed, affords us a historic opportunity to raise growth, reduce inequality and take one giant step towards bridging the gap in attaining the SDGs, three countries said in a joint communique, endorsed by several G20 countries, guest countries and international organisations which participated in the G20 Summit in Brazil.”

Continue reading here.

For conference proceedings of the international scientific conference KNOWCON 2020, click here.