The Unassuming Economist

From a paper by Dong-Hyeon Kim, Peiyao Liu, Shu-Chin Lin:

“Rising income and wealth inequality have renewed interest in their determinants, positioning the financial sector as a central focus of the ongoing debate. Nevertheless, controversy persists regarding the relationship between financial development and economic inequality. While much of the empirical literature focuses on income inequality, wealth inequality has received comparatively less attention. Given the extreme concentration of wealth and its influence on economic opportunity and political power, this paper explores whether it is excessive or insufficient financial development that contributes to the widening disparities in wealth distribution. Using a cross-country panel data framework, the study finds that financial development exacerbates wealth inequality by increasing wealth concentration at the top and diminishing wealth shares in the bottom 50% up to a certain threshold. Beyond this point, financial development results in a reduction of top wealth shares and an increase in the wealth shares of the bottom 50%, thereby narrowing wealth inequality. A similar pattern is observed for income inequality. Pathway analyses indicate that these effects are partially mediated through entrepreneurship. Insufficient financial development adversely impacts both wealth and income distribution.”

From a paper by Liesel A. Ritchie, Susan L. Cutter, Nnenia Campbell, Melanie Gall:

“In the United States, segments of the population were suddenly and unexpectedly thrown into need during the COVID-19 pandemic and began to use food banks and other non-profit organizations providing food services. Here we examine the meaning of what we call the “new vulnerable.” The pandemic became a test of the entire food system, and clearly exposed the need for a re-examination of preparedness in the short run, and vulnerability and resilience in the long term. We explore whether the demographics associated with the drivers of vulnerability (e.g., ageism, racism, ethnocentrism) have changed. The lived experiences of vulnerable groups are defined by a form of epistemic and structural injustice—the dismissal of the knowledge of their own lives and needs that socially marginalized groups experience.”

From a paper by Sergio Julio Chión-Chacón and Kevin Antonio Álvarez García:

“This study empirically investigates the impact of Inflation Targeting (IT) on nominal interest rates over the past 40 years, focusing on 10 advanced and emerging economies. By using a Binary Regime Model embedded within a Backward-Looking Taylor, our findings confirm that IT adoption has significantly contributed to reducing interest rates, with the strongest effects observed in Latin American countries. To reinforce these results, we incorporate Smooth Transition Regression (STR) models, with and without instrumental variables, allowing for a more suitable representation of gradual policy transitions. The STR estimates consistently support our main findings, validating the robustness of the observed impacts. Furthermore, we show that, both before and after IT implementation, central banks display a stronger emphasis on responding to inflation than to the output gap, with this focus intensifying under IT regimes.”

Working papers and conferences:

• Housing Subsidies for Refugees: Experimental Evidence on Life Outcomes and Social Integration in Jordan – NBER
• Housing and Inequality – CEPR
• When land is not enough: Drawing in private investment to increase social rental housing in Spain – Cities
• Measuring Fairness in the U.S. Mortgage Market – Philadelphia Fed
• Constructing Applicants from Loan-Level Data: A Case Study of Mortgage Applications – Philadelphia Fed
• Are First‑Time Home Buyers Facing Desperate Times? – SSRN

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

• Subprime Mortgages Destroyed Them. Who Paid the Price? In “The Killing Fields of East New York,” Stacy Horn profiles one 1990s white-collar crime spree and the wreckage it left behind. – New York Times
• What does Taiwan have to do with US mortgage rates? The weird financial dance between Taiwanese life insurers and US homebuyers – FT
• Asking Rents Mostly Unchanged Year-over-year – Calculated Risk
• Mortgage Applications Increase Marginally in January – NAHB
• CoreLogic: Home Price Growth Ticks Up Slightly in December – CoreLogic
• US Home Price Insights –  February 2025 – CoreLogic

On the US—other developments:    

• Trump Tariffs Risk $29,000 Rise in US Home Building Costs. Canada is the US’s biggest foreign supplier of lumber. Tariffs likely to make it harder for Americans to afford homes – Bloomberg
• Climate Change to Wipe Away $1.5 Trillion in U.S. Home Values, Study Says. Rising home-insurance costs and more homeowners spurning some risky neighborhoods will drive these declines, according to First Street – Wall Street Journal
• That Giant Sucking Sound? It’s Climate Change Devouring Your Home’s Value. – New York Times
• Unaffordability in the West Accelerates Mortgage Buydowns – CoreLogic
• To Rebuild Los Angeles, Fix Zoning. A lot more housing is needed, and not primarily in the areas destroyed by the fires. – The Atlantic
• Are First‑Time Home Buyers Facing Desperate Times? – New York Fed
• Where the housing market shift is happening the fastest right now. Inventory is a key housing metric. Here’s what it’s telling us right now, according to ResiClub’s latest monthly report. – Fast Company
• Fannie and Freddie: Single Family Serious Delinquency Rates Increased in December. Multi-Family Delinquency Rate Declined Slightly in December – Calculated Risk
• Construction Labor Market Softens – NAHB  
• Homeownership Rate for Younger Households Declines – NAHB
• Minnesota’s Multifamily Housing Industry Faces Rising Property Insurance Costs – Minneapolis Fed
• US Housing Market Is Doing Something ‘Very Unusual’ – Newsweek
• Nearly 70% of Single People Struggle to Afford Housing Payments, Compared to 52% of Married People – Redfin
• Will Congress Regulate AI’s Rapid Growth in Real Estate? – CoreLogic   

On Australia and New Zealand:

• [Australia] Australian House Prices Fall Further Led by Sydney and Melbourne. Outlook expected to improve somewhat if rates are reduced. But affordability, slower immigration will keep a lid on gains – Bloomberg
• [New Zealand] Average Wellington house prices plummet nearly 25 percent in latest official valuations – RNZ
• [New Zealand] Economist warns Kiwis not to ‘bet the house’ on housing market – RNZ
• [New Zealand] New Zealand house prices crash – MacroBusiness

On other countries:  

• [Canada] Vancouver: Listings surge as sellers anticipate a housing market revival – National Bank of Canada
• [Canada] Measuring unmet housing need and housing instability in households with roommates and extended family – Statistics Canada
• [Canada] Building new homes in the path of floods and wildfires could cost billions, threaten affordability: report. First-of-its-kind analysis shows significant financial risks from climate change-fuelled disasters unless a small proportion of the new homes needed by 2030 are built out of harm’s way. – Canadian Climate Institute
• [Russia] Moscow Property Rivals London as Rich Russians Bring Cash Home. High-end real estate in the city is seeing a surge in demand as Russians invest back home and turn away from overseas deals because of sanctions. – Bloomberg
• [Spain] La vivienda ya es más cara que nunca: el precio medio superó en 2024 a los años de la burbuja. El importe promedio, con 2.086 euros por metro cuadrado, fue superior al de 2006 y 2007, según la estadística registral, que certifica un nuevo auge del mercado – El Pais
• [Spain] España gasta cuatro veces menos que Europa en vivienda social. El país invirtió de media 34 euros por habitante en asistencia habitacional entre 2007 y 2021, lejos de los 160 euros de la media europea – El Pais
• [Spain] Nuevas previsiones para el sector inmobiliario español: el ciclo alcista se afianza en 2025 – CaixaBank
• [United Kingdom] Peace, permanence and affordable prices: six ways to solve Britain’s housing crisis – The Guardian

From a paper by Emrehan Aktuğ and Abolfazl Rezghi:

“Using a large cross-country dataset covering over 150 countries and more than 10 macroeconomic variables, this study examines the consistency of IMF World Economic Outlook (WEO) forecasts with the full information rational expectations (FIRE) hypothesis. Similar to Consensus Economics forecasts, WEO forecasts exhibit an overreaction to news. Our analysis reveals that this overreaction is asymmetric, with more measured response to bad news, bringing forecasts closer to the FIRE benchmark. Moreover, forecasts align more closely with FIRE hypothesis during economic downturns or when a country is part of an IMF program. Overreaction becomes more pronounced for macroeconomic variables with low persistence and for forecasts over longer horizons, consistent with recent theoretical models. We also develop a model to explain how state-dependent nature of attentiveness may drive this asymmetric overreaction.”