The Unassuming Economist

From a paper by David Barmes, Irene Claeys, Simon Dikau and Luiz Awazu Pereira da Silva:

“Central banks have made significant progress on incorporating climate risks into their monetary policy frameworks to address the economic and financial challenges posed by climate change. Key developments include conducting climate scenario analyses to evaluate the financial system’s resilience to climate-related risks, exploring how climate change affects price stability and monetary policy transmission, integrating climate variables into forecasting frameworks, fostering collaboration through initiatives like the Network for Greening the Financial System (NGFS) and, in some cases, integrating sustainability considerations into monetary operations such as collateral frameworks and quantitative easing programmes. Despite this progress, a critical area remains underexplored: the challenges that inflation-targeting central banks may face if confronted with more frequent, persistent and severe climate-related supply shocks.

Unlike demand shocks, supply shocks create trade-offs for central banks and, unlike transitory supply shocks, persistent supply shocks can lead to a systematic and prolonged overshooting of inflation targets and undermine long-term macroeconomic stability. A small number of senior figures in the central banking community have recently begun to highlight the risks of a future of intensified supply-side volatility (Brainard, 2022; Schnabel, 2023; Maechler, 2024; Bénassy-Quéré, 2024). Building on these analyses, this report aims to spark a policy discussion on adaptive inflation targeting, with a view to equipping central banks with a framework, analysis and toolkit that enables them to better navigate these supply-side disruptions. To maintain credibility and ensure the smooth implementation of possible changes to existing inflation-targeting regimes, central banks must communicate these changes clearly in times of relative stability when inflation is at or around target.”

From The Astana Times:

“Making fiscal policy more pro-poor, improving the quality of education, and strengthening climate resilience are critical priorities for policymakers to reduce poverty and inequality in Kazakhstan, according to the Kazakhstan Poverty and Equity Assessment 2024 report, published by the World Bank on Dec. 12.

Kazakhstan’s economy has shown robust growth since 2006, with an average annual rate of 4.7%. This has improved living standards and elevated the country to upper-middle-income status, lifting 5.9 million people out of poverty and reducing the poverty rate from 49.5% to 8.5% over the same period.

Consumption growth, fueled by higher labor incomes, has been the main driver of poverty reduction. However, the report identifies three distinct phases in Kazakhstan’s poverty reduction journey. Between 2006 and 2013, poverty declined rapidly but saw a partial reversal during the 2014-2016 economic downturn, which increased poverty rates. From 2016 to 2021, poverty reduction resumed but at a slower pace.

The middle class has expanded significantly since 2006, increasing 2.5-fold to reach 67% of the population in 2021, compared to 26% in 2006. However, growth stagnated after 2013 as structural transformation and productivity gains slowed. The report underscores the importance of diversifying Kazakhstan’s economy, which remains heavily dependent on commodity exports.”

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From a paper by Radhika Pandey, Ila Patnaik and Rajeswari Sengupta:

“It has been eight years since India adopted the inflation targeting (IT) framework for its monetary
policy. In this paper we present a comprehensive analysis of the IT regime, addressing several critical
aspects. We evaluate the performance of inflation over this period, and review the conduct of monetary
policy during and after the Covid-19 pandemic. We also identify key challenges that persist particularly
in context of the Impossible Trilemma and highlight issues that may require further examination in
order to improve the effectiveness of the IT framework in the future.”

A list of papers that study the economic effects of rent control

1. Housing market spillovers: Evidence from the end of rent control in Cambridge, Massachusetts – Autor, Palmer, and Pathak (2014)
2. The effects of rent control expansion on tenants, landlords, and inequality: Evidence from San Francisco – Diamond, McQuade, and Qian (2018)
3. Robbing Peter to pay Paul? The redistribution of wealth caused by rent control – Ahern and Giacoletti (2022)
4. Rent control effects through the lens of empirical research: An almost complete review of the literature – Kholodilin (2024)

On cross-country:

• Global house prices rebound as economists predict turning point. Across the 37 industrialised OECD countries, nominal house prices grew 2.1% in the third quarter of 2023 – FT

Working papers and conferences:

• Call for papers: The Journal of Housing Economics seeks contributions to a special issue on the general subject of upzoning. – ScienceDirect
• Conference: 8th Urbanization and Poverty Reduction Research Conference on March 7-8 – World Bank
• Reexamining the ‘Role of the Community Reinvestment Act in Mortgage Supply and the U.S. Housing Boom’ – SSRN
• Land Development and Frictions to Housing Supply Over the Business Cycle – SSRN
• Volatility Connectedness and Spillover of the U.S. Median Home Sale Prices – SSRN
• The Interest Rate Sensitivity of House Prices: International Evidence on its State Dependence – SSRN

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

• Comparing Two House-Price Booms – Cleveland Fed
• A New ‘Holy Grail’ in the Housing Crisis: Statewide Rent Caps. As housing costs soar, Washington State wants to limit annual rent increases to 7 percent. Oregon and California have passed similar measures. – New York Times
• Home Sales Rebounded in January After Last Year’s Sharp Decline. Drop in mortgage rates since October has made home purchasing slightly more affordable – Wall Street Journal
• New Home Sales at 661,000 Annual Rate in January. Median New Home Price is Down 15% from the Peak – Calculated Risk
• Mapped: The Median Down Payment for a House, by U.S. State – Visual Capitalist
• U.S. Median House Prices vs. Income – Visual Capitalist
• Do Early Birds Buy the House? 9 Cities Where the Spring Housing Rush Starts Sooner Than You Think – Realtor.com 
• Case-Shiller: National House Price Index Up 5.5% year-over-year in December. FHFA: House Prices Up 6.5% Q4 over Q4 – Calculated Risk
• US CoreLogic S&P Case-Shiller Index Continues to Strengthen, With Annual Gain of 5.5% in December – CoreLogic
• Real U.S. House Prices UP 4% in 2023 – Real Estate Decoded
• Why US housing inflation relief may be short-lived – Reuters
• Lawler: Update on American Homes for Rent – Calculated Risk
• US Housing Supply Gap Grows in 2023; Growth Outpaces Permits in Fast-Growing Sunbelt Metros – Realtor.com
• US annual home prices rising despite fourth-quarter slowdown, FHFA says – Reuters

On the US—other developments:    

• What Texas can teach San Francisco and London about building houses. It’s not a housing crisis — it’s a planning crisis – FT
• Housing Costs Are Running Hot, but Is the Data Missing a Cooling Trend? Pandemic disruptions may have muddled the measurement of home prices in inflation data. That could complicate the Fed’s course on interest rates. – New York Times
• U.S. Commercial Foreclosures Increase in January 2024 – ATTOM
• Home buyers can sue brokerages over real estate commissions, US judge rules – Reuters
• ‘Build, baby, build!’: Governors take a walk on housing’s supply side. – Washington Post
• A housing shortage is testing Oregon’s pioneering land use law. Lawmakers are set to tweak it – AP
• Final Look at Local Housing Markets in January – Calculated Risk
• What Has Zoning Reform Accomplished in Cambridge, Massachusetts? – Harvard Joint Center for Housing Studies
• U.S. Economic, Housing and Mortgage Market Outlook – February 2024 – Freddie Mac
• Affordable Housing: Tax Credits vs Deregulation – Cato Institute
• Aspiring homeowners say they face two major obstacles to buying. Here’s why 20% say it’ll ‘never’ happen – CNBC
• The Workforce/Middle-Income Housing Tax Credit – AEI
• Freddie Reports Surge in Multifamily Serious Delinquencies – Calculated Risk   
• The American Southwest Is Finally Starting to Embrace Vertical Living. New building codes and zoning laws are paving the way for development in the desert, which has long been an oasis of single-family homes – Wall Street Journal
• Buying a Home Near Nvidia’s Headquarters Is Nearly Impossible Right Now. Blame Santa Clara’s inventory and relative affordability—not the company’s stock run-up—for creating such a competitive market – Wall Street Journal
• FACT SHEET: Biden-⁠Harris Administration Announces New Actions to Boost Housing Supply and Lower Housing Costs – White House
• The U.S. Housing Market Gained $2 Trillion in Value Over the Last Year. The total value of U.S. homes jumped 5%, the biggest gain in nearly a year, as a shortage of houses for sale propped up values. Affordable East Coast and Midwest metros saw gains of over 10%, while pricey metros and pandemic boomtowns saw declines. – Redfin

On China:

• China Home Prices Slide, Increasing Pressure on Beijing. The country’s real estate slump has dealt a major blow to confidence – Wall Street Journal
• Shenzhen offers glimpse of China’s housing future – Reuters

On other countries:  

• [Australia] Amid Australia’s housing crisis, why are taxpayers propping up the price of empty holiday homes? The sheer number of Airbnb and Stayz short-stay rentals is a symptom of a system that’s unfair at its core – The Guardian
• [Australia] Regional housing markets outpace the capitals as rates rise – Financial Review
• [Australia] Australia home prices likely to rise 5.0% this year and next – Reuters
• [Canada] Canada’s extension of ban on foreign real estate buyers labelled political, not practical – Reuters
• [Germany] Germany home prices to slip modestly this year as supply stays tight – Reuters
• [Hong Kong] Hong Kong Takes Drastic Action to Avert Property Slump. The city’s real-estate market has been hurt by high interest rates and mainland China’s economic slowdown – Wall Street Journal
• [New Zealand] Trudeau’s New Zealand May Allow Foreigners to Buy Build-to-Rent Homes. Finance Minister says government wants to boost housing supply. ‘Our overseas investment regime has been quite restrictive’ – Bloomberg
• [Philippines] Global rich keep luxury property prices rising as Manila, Dubai soar – Knight Frank – Reuters
• [United Kingdom] Seniors Sit on the Answer to the UK Housing Shortage. If more over-65s step off the housing ladder, more young people can step on. – Bloomberg
• [United Kingdom] UK builders and government need to fix housing shortage, regulator says – Reuters
• [United Kingdom] Britain’s interwar apartment boom. A decade of Art Deco densification – The Works in Progress
• [United Kingdom] Spending on UK social housing will ‘save taxpayers money’ in long term, study finds. Upfront cost of building 90,000 new homes would be returned within 11 years, say Shelter and NHF – FT
• [United Kingdom] UK Mortgage Approvals Hit 15-Month High as Borrowing Jumps. Bank of England data suggest housing market gaining momentum. Mortgage interest rates have been creeping higher again – Bloomberg