The Unassuming Economist

From a paper by Domenico D’Ausilio & Massimiliano Cerciello:

“This paper investigates the relationship between monetary policy and income inequality across 32 OECD countries over the period 1995 to 2023. We estimate a dynamic panel model using the system Generalised Method of Moments estimator, accounting for persistence in inequality, unobserved country heterogeneity, and potential endogeneity between monetary policy and distributional outcomes. To capture non-linear transmission, the short-term nominal interest rate enters the model in both linear and quadratic form. Income inequality is measured through the Gini index and the income shares held by the top 10%, middle 40%, and bottom 50%, distinguishing between gross and net income to account for fiscal redistribution. The results show that monetary policy tightening and sufficiently large monetary easing are both associated with lower inequality, mainly through a decline in the top income share and an increase in the bottom 50% share. Smaller rate cuts, by contrast, are associated with higher inequality. These patterns suggest that the distributional effects of monetary policy vary with the intensity of the policy stance and the segment of the income distribution considered, while fiscal redistribution attenuates but does not eliminate the underlying non-linear relationship.”

On cross-country:

• Global House Price Index – Global Property Guide
• Recent developments in housing and mortgage markets in Europe and beyond. – The European Mortgage Federation

Working papers and conferences:  

• Locked Out: Drivers and Economic Implications of Declining Housing Affordability in Europe – IMF
• Housing Wealth Accumulation and Electoral Representation – NBER
• Do housing price cycles reflect herd behaviour in developing and emerging economies? Available to Purchase – International Journal of Housing Markets and Analysis

On China:

• China home prices remain weak, keeping pressure on economy – Reuters

On Australia and New Zealand:

• [Australia] Data centre boom to put pressure on interest rates, housing – Financial Review
• [Australia] ‘Small price to pay’: the young homeowners welcoming falling house prices even as it hurts them. Some buyers say they are ready to absorb the fallout of housing weakness if it means boosting home ownership across the board – The Guardian
• [Australia] Sydney housing slump creates pandemic-sized hole in state tax take – Reuters
• [New Zealand] Auckland and Wellington hit record property market lows – RNZ

On other countries:  

• [Canada] Home Sales in Canada Decline as Trade War With the US Escalates – Bloomberg
• [Canada] Canadian home sales fall in August as economic uncertainty grows – Reuters
• [Canada] Canada Housing Starts Edge Down in August. Construction slowdown adds to signs the property market is stalling – Wall Street Journal
• [Hong Kong] Hong Kong home prices headed for 15% gain this year, Midland forecast says. As the market digests uncertainties, new property launches are accelerating and buyers are returning to the market, executive says – South China Morning Post
• [Hong Kong] Hong Kong’s first five-year plan aims to add jobs, homes – Reuters
• [Ireland] Irish house price inflation slows to new two-and-a-half-year low
• Increased supply and rising interest rates have cooled the market somewhat this year – The Irish Times
• [Korea] South Korea’s Lee hits new approval low as housing discontent grows – Reuters
• [United Kingdom] First-time buyers load up on mortgage debt after change in lending rules. High loan-to-income products have been flying off the shelves since the rules were loosened last year – FT
• [United Kingdom] Help to Buy scheme was ‘very high value for money’, says official review. Government ministers under Sir Keir Starmer had been preparing to unveil a new version of the flagship programme – FT

On prices, rent, and mortgage:    

• Realtors Believe House Prices Set To Skyrocket in California Beach Town – Realtor.com
• September ICE Mortgage Monitor: Annual home price growth was 1.5% in August. However, “home price growth has already begun to cool again” – Calculated Risk
• Custom Home Premium Highest Since 2011 – NAHB
• The Stagnant Housing Market Is About to Face a 7% Mortgage. The housing market is approaching the highest mortgage rate since January 2025, likely spooking home buyers and home builders even more – Wall Street Journal
• Can the Housing Market Survive More Fed Rate Hikes? – Realtor.com
• The Stagnant Housing Market Is About to Face a 7% Mortgage. The housing market is approaching the highest mortgage rate since January 2025, likely spooking home buyers and home builders even more – Wall Street Journal
• High mortgage rates to keep US housing market revival elusive – Reuters 
• Rent Control’s Revenge. While San Francisco’s mayor calls for more rent control, Providence’s mayor loses his primary for opposing the policy. – Reason

On sales, permits, starts, and supply:     

• Existing Home Sales Fall despite Improved Inventory – NAHB
• US home sales slowest in more than a year as mortgage rates and prices climb. Housing market has been stymied by borrowing costs, as Iran war pushed mortgage rates higher – The Guardian
• Congress took action on housing. Now, supply and affordability gains depend on implementation. – JPMorgan Chase
• Airbnb Sets Up $250 Million Fund to Invest in Housing Construction. Short-term rental platform pledges to fill financing holes that have stalled developments – Wall Street Journal
• Single-Family Permitting Declines Through July as Multifamily Activity Remains Stronger – NAHB
• Builder Sentiment Falls on Higher Interest Rates and Costs – NAHB
• Developers are learning to love Zohran Mamdani. New York’s socialist mayor wants a housing boom – The Economist
• Housing Starts Decreased to 1.275 million Annual Rate in August – Calculated Risk
• Lennar Cuts Deliveries Target Again on Rate Pressure, Housing Market Conditions. The homebuilding company said it expects full-year home deliveries of between 80,000 and 81,000 homes – Wall Street Journal

On other developments:    

• 15th Annual Housing Center Conference on October 28-29 – AEI
• August 2026 Luxury Housing Report: The 1% – Where Ultraluxury Stands Out – Realtor.com
• Rings to Roofs, Part I – AEI
• High Frequency Data: Purchase Applications Weak. Builder Confidence Falls Further – Calculated Risk
• Foreclosure Activity Remains Above Year-Ago Levels in August 2026 – ATTOM

From a paper byNitiphong Songsrirote & Nalinee Himpong:

“Why do economies that undertake broadly similar industrial and institutional reforms follow markedly different growth trajectories? This study reassesses the manufacturing-led growth hypothesis by examining whether the gains from structural transformation vary across growth regimes and are shaped by institutional quality and resource dependence. Using an annual panel of 217 economies for 1981–2024, the analysis combines MICE imputation, two-state Markov-switching AR(1) regime classification, regime-specific two-step System GMM, observed-WGI validity checks, conservative instrument tests, lambda-sensitivity analysis, and an MI20 consistency check. Given the observational macro-panel design and the use of internal instruments, the estimates are interpreted as dynamic conditional associations, rather than causal effects. Manufacturing intensity does not emerge as a robust predictor of growth performance: in the adjusted baseline model, it is negatively associated with growth in the high-growth regime and weakly negative in the low-growth regime, while losing statistical significance in the observed-WGI, conservative-instrument, post-2000, and MI20 checks. Institutional quality is a more consistent growth-supporting correlate, operating primarily through a direct institutional growth channel rather than through manufacturing-based moderation.”

On cross-country:

• Real global house prices declined by 1.2% year on year in the first quarter of 2026. Real prices stopped growing in advanced economies, and continued to decrease in emerging market economies, mainly driven by developments in Asia. – BIS
• EU to crack down on short-term rentals in bid to slash housing prices. The bloc’s new Affordable Housing Act will give local and regional governments legal cover to curb tourist flats. – Politico
• Questions and answers on the Affordable Housing Act – European Commission
• How would you like to have 10 fewer years left on your mortgage? Did you know that in many countries, the typical mortgage is 20 years long, not 30 years long? – Real Estate Decoded

On Australia and New Zealand:

• [Australia] Australia has a housing shortage. So why are Bathla and other home builders collapsing? – The conversation
• [Australia] Australia’s Housing Pain Likely to Deepen on Interest-Rate Pressure – Bloomberg
• [Australia] Housing shortage will cause prices to start rising again: Westpac boss – Financial Review
• [Australia] Forget falling house prices: The real threat is a big jump in rents. The big risk over the next couple of years is a downturn in housing construction that crimps the supply of new homes and causes a squeeze on renters. – Financial Review
• [Australia] High-end property hit by steepest price falls as affordable end of Australia’s housing market proves resilient. Despite falls in some parts of the market, prices are showing signs of stabilising as investors exit and first-time buyers move in, analysts say – The Guardian
• [Australia] High-end property hit by steepest price falls as affordable end of Australia’s housing market proves resilient. Despite falls in some parts of the market, prices are showing signs of stabilising as investors exit and first-time buyers move in, analysts say – The Guardian
• [New Zealand] Housing market continues to soften in three months to August – QV – RNZ
• [New Zealand] New Zealand to allow wealthy migrants to build rental housing – Reuters

On other countries:  

• [Canada] Canada’s housing markets show persistent regional splits – RBC
• [Korea] South Korea’s AI property boom puts pressure on president. Runaway prices in Seoul are becoming a political risk for Lee Jae Myung as youth anger mounts – FT
• [Spain] Spain home prices rise 12.2% in second quarter, extending streak of double-digit growth – Reuters
• [United Kingdom] UK house prices fall for first time since November 2023, Lloyds data shows – Reuters
• [United Kingdom] UK house prices fall for first time since 2023, led by London and south-east. Average property cost £298,468 in August, down by 0.4% year on year amid higher interest rates, says Lloyds – The Guardian
• [United Kingdom] The British Housing Market Continues to Weaken. Prices fell year-on-year in August, for the first time since 2023, according to lender Lloyds. – Bloomberg