The Unassuming Economist

From a paper by Tobias Herbst, Moritz Kuhn, and Farzad Saidi:

“Houses are the most important asset on American households’ balance sheets, rendering the U.S. economy sensitive to house prices. There is a consensus that credit conditions affect house prices, but to what extent remains controversial, as an expansion in credit supply often coincides with changes in house price expectations. To address this longstanding question, we rely on novel microdata on the universe of mortgages guaranteed under the Veterans Administration (VA) loan program. We use the expansion of eligibility of veterans for the VA loan program following the Gulf War to estimate a long-lived effect of credit supply on house prices. We then exploit the segmentation of the conventional mortgage market from program eligibility to link this sustained house price growth to developments in the initially unaffected segment of the credit market. We uncover a net increase in credit for all other residential mortgage applicants that aligns closely with the evolution of house price growth, which supports the view that credit-induced house price shocks are amplified by beliefs.”

From Minneapolis Fed:

“In 2024, 24 papers were added to the Institute Working Papers series, bringing the total in the series to 108. These papers make use of frontier methods to conduct empirical analysis and build models of economic processes. Institute economists were authors on eight of the new papers in 2024. Two of these papers analyze novel datasets that the authors created and made public. Two others look at the early impact of new labor policies: a guaranteed basic income program and a prohibition on domestic outsourcing.

This summary article provides a brief overview of the main findings of all 24 new additions from 2024.

Labor markets

Artificial intelligence dominated headlines in 2024, offering opportunities and provoking concerns. For workers, one concern is how wages and employment will respond to the current wave of technological innovation. In “New Technologies and Jobs in Europe,” Stefania Albanesi, António Dias da Silva, Juan F. Jimeno, Ana Lamo, and Alena Wabitsch investigate the impact of AI on relative employment and wages by occupation in 16 European countries over the period 2011 to 2019. Their results suggest that the adoption of AI has not been associated with lower aggregate employment in Europe.”

Continue reading here.

From the World Economic Forum:

“The World Economic Forum’s Annual Meeting 2025 united more than 3,000 global leaders to tackle technological, economic and climate challenges under the theme “Collaboration in the Intelligent Age”.

For me, as Secretary-General of the International Organization for Standardization (ISO), the gathering served as a powerful opportunity to reinforce the crucial role international standards play in addressing the world’s most pressing challenges.

From advancing the responsible use of technology to driving the energy transition and fostering inclusivity, standards provide the trust and shared frameworks needed to unlock progress.

Davos is more than a meeting of minds – it is a catalyst for collective action on the defining challenges of our time: achieving net zero, adapting to climate impacts, harnessing technology responsibly, and ensuring innovation benefits everyone.

The discussions emphasized that by fostering collaboration across sectors and regions, we can truly transform global challenges into opportunities for sustainable and inclusive growth.”

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From a post by M. Nolan Gray:

“After a lot of hard work by activists, America’s political class has finally started to accept that we are in a housing crisis that is ruining everything. But what do we mean when we talk about a housing crisis? The reality is that housing market conditions are quite varied across the United States. There is not one single crisis, but three different varieties of housing crisis that require three different policy responses.

• Housing Shortage Crisis: These are the places where there is simply too little housing, of every variety, everywhere in the city. In these places, we urgently need to build more housing, in any form.
• Housing Inaccessibility Crisis: These are the places where housing is cheap by national standards, yet still inaccessible due to low local incomes. In these places, the near-term fix is to build subsidized deed-restricted affordable housing and expand access to housing choice vouchers. The long-term fix is to create the conditions for economic revitalization.”

Continue reading here.

From a paper by Ihtisham Hussain, Abdul Saqib, and Hooi Hooi Lean:

“Alleviating environmental damage has become a significant challenge for BRICS countries, where economic progress amidst urbanization and fossil fuel consumption pollutes the environment. In this context, BRICS countries must transition from fossil fuels to green energy to sustain their economic progress and protect the environment. However, economic policy uncertainty may affect their fight against climate change and their actions towards environmental sustainability. Therefore, this study examines the roles of economic policy uncertainty and green energy in the environmental sustainability of BRICS countries. Under the STIRPAT framework, we employ a novel augmented autoregressive distributed lag model. Our results show that green energy has a negative and significant impact on carbon emissions and temperature. Moreover, economic policy uncertainty aggravates carbon emissions and temperature in India and Russia. But it was found to reduce carbon emissions and temperature in Brazil and China. To better address the impacts of policy uncertainty on environmental outcomes, Brazil and China should expand renewable energy investments and stabilize economic policies, while India and Russia could prioritize the transition to cleaner technologies and reduce their reliance on fossil fuels to enhance environmental sustainability.”