The Unassuming Economist

From a paper by Mulu Gebreeyesus, and Getachew Ahmed Abegaz:

“This paper analyzes Ethiopia’s structural transformation from 2000 to 2022 across four
dimensions: employment, productivity, skill intensity, and tradability. While the country achieved
strong economic growth, averaging 8.9 percent annually, its structural transformation has been
uneven and incomplete. Labor has shifted out of agriculture, but mainly into low-productivity
informal services, while manufacturing’s employment share declined despite policy support.
Aggregate productivity growth, though substantial, was driven largely by within-sector gains, with
minimal contribution from labor reallocation. High-productivity sectors, including manufacturing
and modern services, remain small, capital-intensive, and poorly connected to employment and
exports. Ethiopia’s tradable sector is narrow, dominated by agricultural commodities and air
transport, with limited value-added in manufacturing and ICT. Comparative analysis shows that
while Ethiopia has outpaced many African peers in productivity, it lags in employment absorption
and export diversification, contrasting sharply with East Asia’s inclusive, manufacturing-led
growth. The findings point to a disconnect between output growth and structural inclusion.
Addressing this requires a hybrid strategy that expands labor-intensive manufacturing, upgrades
informal services, aligns skills with market demand, and diversifies tradable activities. Ethiopia’s
experience offers a critical lesson for other developing countries: sustained transformation
depends not only on growth, but on how this growth reallocates labor and resources toward more
productive sectors.”

From a paper by John Beirne, Haroon Mumtaz, Donghyun Park, Gazi Salah Uddin, and Angeliki Theophilopoulou:

“This paper investigates the heterogeneous effects of military spending news shocks on household income and wealth inequality for a large, panel of advanced and emerging economies. Confirming prior literature, we find that military spending news shocks lead to persistent increases in aggregate output and Total Factor Productivity. Our primary contribution is documenting contrasting distributional impacts. We find that expansionary military spending is associated with a mitigation of income inequality, as income gains are disproportionately larger at the left tail of the distribution, primarily driven by a rise in labour income and employment in industry. Conversely, the shock is found to increase wealth inequality, particularly in high-income countries, by raising the wealth share of the top decile (P100) via effects on business asset holdings.”

On cross-country:

• The European ski resorts cracking down on second homes. A blizzard of regulations aims to avoid soulless low seasons and help year-round residents – FT

Working papers and conferences:

• The financialization of rental housing 3.0 – Sage Journals
• Housing costs and fertility – Marginal Revolution
• The Mortgage Debt Channel of Monetary Policy when Mortgages are Liquid – NBER
• Affordable Housing During Childhood Improves Long-term Outcomes of Women and their Children – NBER
• The Great Reshuffle: Remote Work and Residential Sorting – Philadelphia Fed
• Misestimating House Values: Consequences for Household Finance – Boston Fed
• Local Discretion in Low-Income Housing Policy: Evidence from France – New York University
• Single-Family REITs and Local Housing Markets – Philadelphia Fed
• The keys to house price growth – Bank of England
• The Fed, Mortgage Rates, and Home Prices – Boston College

On China:

• How Chinese Real Estate Became the Biggest Bubble in History. The ultimate property boom. – Bloomberg

On Australia and New Zealand:

• [Australia] Australian Home Loans Soar to Record, Reinforcing RBA Pause – Bloomberg
• [Australia] The longest city is short on homes. Perth is the longest city in the world, yet painfully short of homes where people most want to live. And the biggest culprit? Restrictive planning rules that ban building more homes in Perth’s inner and middle suburbs. – Grattan Institute
• [Australia] The Sydney suburbs where home sellers want $2m more than buyer budgets – The Syndey Morning Herald 
• [Australia] Property investors make up two in every five Australian home loans amid record borrowing. Investor home borrowing surges nearly 18% in the September quarter compared with previous three months, prompting calls to ‘urgently rein in overheated credit market’ – The Guardian
• [Australia] What’s behind the relentless rise in house prices. John Kehoe and Michael Bleby on the RBA’s inflation dilemma, why the next interest rate move might be up and how that will affect the property market. – AFR
• [Australia] The 5% first home buyers scheme is a miserable policy failure – and the latest chapter in Australia’s housing disgrace. The government is juicing demand to make houses more expensive for Australians while providing good public housing for … Americans – The Guardian  
• [New Zealand] First-Time Home Buyers Finally Find Relief in New Zealand’s Market – Bloomberg

On other countries:  

• [Canada] Sluggish homebuilding will have far-reaching effects on Canada’s economy – Fraser Institute
• [Ireland] Delivering Homes, Building Communities 2025-2030 – Government of Ireland
• [Kenya] World Bank Plans $1.35 Billion Funding to Boost Kenya’s Housing – Bloomberg
• [United Arab Emirates] UAE Residential Property Price Report October 2025 – REIDIN
• [United Kingdom] ‘Poor doors’: affordable housing tenants have to use back entrance to access Barangaroo apartments – The Guardian
• [United Kingdom] UK house prices rise at fastest rate since January 2025. Halifax says October increase pushes average cost of home to £300k despite uncertainty over possible budget tax changes – The Guardian
• [United Kingdom] UK house prices hit record high as October growth outstrips forecasts. Rise comes despite nervousness ahead of November Budget – FT
•  [United Kingdom] ‘We cannot survive — there is no new land.’ Why Scotland is not building enough homes. Housebuilders want government to ease regulations and do more to help councils deal with acute shortage of planners – FT
• [United Kingdom] UK housing market slows as confidence falls ahead of budget, RICS survey shows – Reuters

From a paper by Martin T. Bohl, Niklas Humann, and Pierre L. Siklos:

“This survey synthesizes evidence on the bidirectional links between commodity markets and monetary policy. On the commodities-to-policy side, we review how shocks to energy, food, and metals pass through to inflation, inflation expectations, economic activity, and financial stability in state-dependent ways that vary by shock type, exposure, and policy regime. We complement the literature with an analysis of central-bank speeches, showing how officials classify commodity shocks and how these framings map into policy stances. On the policy-to-commodities side, we organize evidence on the transmission of monetary policy to commodity markets via financial, real-economy, and expectations channels, highlighting heterogeneity across policy instruments, commodities, and central banks. We emphasize how financialization tightens cross-asset linkages, raises leverage and margin sensitivity, and amplifies discount-rate and risk-taking mechanisms. Overall, commodities are best treated as policy sensitive state variables, not exogenous disturbances, with implications for policy design, central bank communication, and international monetary spillovers.”

From a paper by Tim Köhler:

“This study presents an examination of the predictive power of narrative reports from German economic institutes beyond traditional quantitative forecasts in anticipating economic recessions and directional changes in the business cycle. I transform qualitative narratives into quantitative sentiment scores using four different dictionaries and methods and use fixed-effect logistic regression to analyse their impact. To evaluate model performance, I use the Area under the Receiver Operating Characteristic Curve (AUROC) to compare models with versus without sentiment scores. Additionally, I employ DeLong’s test and bootstrapping to test the significance of AUROC improvements. Furthermore, I explore the potential of combining multiple sentiment scores to enhance forecasting accuracy. The results show that sentiment scores significantly enhance forecasting accuracy. This suggests that narrative information provides valuable insights beyond quantitative forecasts alone.”