The Unassuming Economist

From a paper by Supipi Hansika, Priyan Navamohan, Dinuli Gamage, Ridmi Madurawala &  Ruwan Jayathilaka:

“In the modern world, exploring economic uncertainty and the unpredictability in economic conditions is crucial to determine its impact on day-to-day society. However, existing literature has examined this relationship in a generalised manner, often without focusing on the bi-directional effects among these variables. This study explores the causal and cointegrating interrelationships among economic uncertainty and suicide rates, unemployment rates, economic growth, and trade openness across 30 high uncertainty countries utilising Granger causality test and Cointegration test. Unlike existing studies, which focus on a certain country or region, the current findings disclose bi-directional causation between the measured variables, particularly in Kenya, Finland, Portugal, Latvia, Peru, Haiti, Mexico, Kazakhstan and Kyrgyz Republic. The cointegration tests show that while uncertainty reduces economic growth and trade openness in the long run, in line with contemporary literature, uncertainty also reduces suicide rates and unemployment rates in the long term. By analysing the countries with the highest economic uncertainty, this study aims to provide country-specific policies in line with Sustainable Development Goals (SDGs) developed by United Nations (UN) to navigate the bi-directional effects among economic uncertainty and the linked variables.”

On prices, rent, and mortgage:    

• Mortgage Refinancing Starts to Thaw as Rates Trend Down. It has been a frustrating wait for people who bought homes in the past few years, when mortgage rates have been high – Wall Street Journal
• Mortgages Could Shrug Off a Fed Cut—but Not This One – Barron’s
• House Price Appreciation by State and Metro Area: Second Quarter 2025 – NAHB
• US Housing Outlook – Apollo
• The U.S. housing market is ‘finally starting to listen’ to homebuyers plagued by high mortgage rates and home prices, economist says – Fortune

On sales, permits, starts, and supply:    

• Homebuilder inventory hits 2009 levels—creating deals in these housing markets. A record 121,000 completed single-family homes sat unsold in July, as affordability challenges weigh on buyers in key Sun Belt markets. – Fast Company
• Forget YIMBY. The housing shortage could disappear on its own. Demographic shifts and construction surges are likely to resolve the housing crisis without federal intervention. – Washington Post
• The 5 most competitive housing markets in America right now — and the 5 least. Some cities are still seeing bidding wars — but others are flooded with inventory – Quartz
• June Private Residential Construction Spending Edges Higher – NAHB
• U.S. construction spending fell in July amid a slow housing market. Construction spending was down 2.8% year-over-year in July, according to data from the U.S. Census Bureau – Quartz
• The Mobile Home Comeback: New California Program Offers Cash To Repair or Replace Aging Homes – Realtor.com
• Open Construction Jobs Rise in July – NAHB
• How We Are Working to Increase the Multifamily Housing Supply – Freddie Mac
• Congress continues to advance significant housing supply incentives – JP Morgan Chase

On other developments:    

• Bubble thought: What beliefs can reveal about housing market risks – Dallas Fed
• Dynamic Tables: Comparing Cities – Home Economics
• Trump May Declare a National Housing Emergency: What to Know – Time
• Bessent: Everything on table for housing affordability fixes – Axios
• Bessent says Trump administration will tackle high housing costs with new measures – Reuters
• Trump wants to ax an affordable housing grant, a lifeline for many rural communities – Los Angeles Times   
• Trump Considers Declaring National Housing Emergency This Fall – Realtor.com
• Yes, America Has a Housing Emergency. But Trump will make it worse – Paul Krugman
• The Trump Administration’s Fake Housing Emergency. The results of America’s overly burdensome housing regulations aren’t great. But they’re not an “emergency.” – Reason
• The Face of Homeownership in the U.S. is Getting Older—What You Need to Know – Realtor.com
• There’s a housing market shift afoot—just ask Realtors. Among real estate agents that Zoodealio and ResiClub surveyed, 81% say buyers are gaining leverage in their local housing market—that share is even higher among agents based in the Southwest (96%). – Fast Company
• NAHB HBGI:  Relative Gains for Smaller Markets, Particularly for Multifamily – NAHB
• America is escaping its office crisis. The torment caused by covid-19 and high interest rates appears to be over – The Economist
• Cruel Summer: Why the U.S. Housing Market Is Stuck – Realtor.com
• Trump’s “One Big Beautiful Bill” and the Affordable Housing Crisis: A Closer Look –CEPR
• U.S. Housing Costs to Return to ‘Normal’ by 2030 With Stable Price Growth and Moderately Lower Rates – Realtor.com
• The ‘abundance movement’ needs to help distressed places, not just booming ones – Brookings 
• Strong Foundations: A Playbook for Housing and Economic Growth – AEI
• Wall Street Is Killing the Housing Market. Investment giants are buying up homes and pricing real people out of the market. But it doesn’t have to be this way. – Inequality.org
• I Did My Dissertation on Housing Displacement. Then I Experienced It Myself. If someone like me can get trapped in the cycle of housing instability, anyone can. But the solutions are out there. – Inequality.org
• Metro Area Growth at Risk from Recent Drop in Immigration – Harvard Joint Center for Housing Studies
• California and Florida Top New List of the Riskiest Housing Markets in the Nation – Realtor.com

From a paper by Gregor Semieniuk, Isabella M. Weber, Iain S. Weaver, Evan Wasner, Benjamin Braun, Philip B. Holden, Pablo Salas, Jean-Francois Mercure, and Neil R. Edwards:

“The 2022 oil and gas crisis resulted in record fossil-fuel profits globally that rehabilitated the oil and gas industry, obstructed the energy transition and contributed to inflation, but their magnitude and beneficiaries have been insufficiently understood. Here we show the size of profits across countries and their distribution across socio-economic groups within the United States, using company income statements, comprehensive ownership data and a network model for propagating profits via shareholdings. We estimate that globally, net income in publicly listed oil and gas companies alone reached US$916 billion in 2022, with the United States the biggest beneficiary with claims on US$301 billion, more than U.S. investments of US$267 billion in the low carbon economy that year. In a network of U.S. shareholdings with 252,433 nodes including privately held U.S. companies, 50 % of profits went to the wealthiest 1 % of individuals, predominantly through direct shareholdings and private company ownership. In contrast the bottom 50 % only received 1 %. The incremental U.S. fossil-fuel profits in 2022 relative to 2021 were enough to increase the disposable income of the wealthiest Americans by several percent and compensate a substantial part of their purchasing power loss from inflation that year, thereby exacerbating inflation inequality. These profits also reinforced existing racial and ethnic inequalities and inequalities between groups with different educational attainments. We discuss how an excess profit tax could be used to both lower inequality and accelerate the energy transition as increasing geopolitical tensions and climate impacts threaten continued volatility in oil and gas markets.”

This article first appeared in the India@100 special issue of Business Today. Here is a link to the image of the article. The full text is provided below:

In 1500, India was one of the advanced economies of the world. Now, it is trying to make it way back into the advanced countries’ club. India is the fastest-growing major economy in the world, and is expected to contribute a remarkable 20 percent of global growth in the coming years (Econofact, 2025). It would be felicitous if the re-entry happened by 2047, a 100 years after independence.

But re-entry will be a remarkable achievement even if it occurs a couple of years or even a couple of decades later. Growth is a marathon race, not a sprint.

A question for policymakers to ponder in the interim is: how can India’s stay in the club be a durable one? What does economic theory and country experience teach us about why some countries become permanent residents of the club, while others go in and out, as though on a tourist visa? 

When thinking about the lessons from economic theory, I am reminded of the time my American wife first expressed an interest in cooking Indian food. Delighted by her interest, I purchased a cookbook by Madhur Jaffrey. Her wonderful recipes provided not just the list of ingredients, but specified the size of the pot or pan my wife should use, the sequence in which to put in the ingredients and exactly how long to stir them. The result was a reliably-delicious gravy. Other cookbooks were less helpful. One of them, which we joke about to this day, simply instructed her to throw all the ingredients simultaneously into a pot of unspecified size and “stir until the gravy is highly delicious”.

Economic cookbooks are sadly of the latter variety. In 2001, the World Bank assembled a group of Masterchefs and asked them to come up with a reliable recipe for growing the economic pie. The group included Nobel laureates like Michael Spence and top policymakers like India’s own Montek Singh Ahluwalia. The group identified the common features of the growth miracles of their time, like that of China. Most of these features turned out to be the expected ones, much like the tomatoes and onions of an Indian gravy. One feature was prudent macroeconomic policy; fiscal deficits and inflation had to be contained to keep the growth party going for long. Another feature was openness: countries with durable growth remained open to trade, technology and expertise from the rest of the world.

But the so-called Spence report  also revealed a common feature that the chefs weren’t expecting: this secret ingredient is inclusion. Countries with durable growth were more likely to be ones where  growth during the miracle years included broad segments of the society, instead of being confined to particular income classes, sectors, regions or gender.  By this metric, India is in great shape. Growth has been associated with remarkable declines in poverty (The Economist, 2025) and no increase, if any, in income inequality. Women’s participation in the economy has increased substantially. and growth has been shared across  states and has included both urban and rural areas (Balasubramanian, Loungani and Kumar, 2021). On all these fronts, there is much room for further improvement, but it is also important to take note of, and rejoice in, the fact that India has achieved not just a growth miracle’ but an ‘inclusive growth miracle’ (Ahluwalia, 2001).  

If past experience remains a reliable guide, the inclusive nature of India’s growth raises the odds that its’ stay in the rich countries’ club will be a durable one.

The author is the Director of the M.S. in Applied Economics program at Johns Hopkins University, where he teaches a course on Economic Growth (jointly with Karan Bhasin). He is the author of Confronting inequality: How Societies Can choose inclusive Growth (Columbia University Press, 2019).

From a paper by Martin Boďa, Mariana Považanová, and Katarína Vitálišová:

“Whilst the economic success of ASEAN countries is frequently attributed to the transformation of their economies towards digitalization and technical innovation, little is known about the unemployment-output behaviour of ASEAN economies in the course of the business cycle. One aspect of this conjunctural behaviour is studied in this chapter in the hope of providing insights into how the unemployment-output relationship–enacted in Okun’s law––unfolds in conjunction with the structural changes of their economies and other factors. A two-stage procedure is applied to that end. First, for a period of three decades, 1991–2022, a time-varying version of Okun’s law is estimated for each ASEAN economy. Second, the estimated Okun coefficients are matched against a set of explanatory variables including various metrics of digitalization, sectoral and labour market characteristics. The results indicate that in the majority of ASEAN economies unemployment was mostly insensitive to output, or that the unemployment-output relationship was constant and otherwise of a negligible magnitude, which corroborates the resilience of economic growth in the Southeast Asian region. Nonetheless, this sensitivity is heightened by the reorientation towards medium and high-tech industries whilst the adoption of digital technologies by the population has actually no effect per se.”