The Unassuming Economist

From a new IMF working paper by Sriram Balasubramanian and Paul Cashin:

“This paper examines the origins and use of the concept of Gross National Happiness (or subjective well-being) in the Kingdom of Bhutan, and the relationship between measured well-being and macroeconomic indicators. While there are only a few national surveys of Gross National Happiness in Bhutan, the concept has been used to guide public policymaking for the country’s various Five-Year Plans. Consistent with the Easterlin Paradox, available evidence indicates that Bhutan’s rapid increase in national income is only weakly associated with increases in measured levels of well-being. It will be important for Bhutan to undertake more frequent Gross National Happiness surveys and evaluations, to better build evidence for comovement of well-being and macroeconomic concepts such as real national income.”

On cross-country:

• London, New York and Hong Kong Are No Longer Immune to Global Housing Downturn – Bloomberg
• Global Housing and Mortgage: Outlook 2019 – Fitch Ratings

On the US:

• What if Cities Are No Longer the Land of Opportunity for Low-Skilled Workers? – New York Times
• Recession Signals: Four Housing Indicators to Watch in 2019 – Federal Reserve Bank of St. Louis
• Thousands Face Threat Of Eviction After HUD Contracts Expire Due To Shutdown – NPR
• Your Taxes (Once Again) Are Underwriting Bad Mortgage Loans – Foundation for Economic Education
• Using Data Visualizations to Explain Housing and Mortgages – Barry L. Ritholtz
• Examining Both Sides of the Transaction: Bargaining in the Housing Market – Real Estate Economics
• Real Estate Investors See Riches in a Tax Break Meant to Help the Poor – Bloomberg
• Home Personal Finance Real Estate Buyers are finally finding more discounts on new homes – MarketWatch
• Microsoft Pledges $500 Million for Affordable Housing in Seattle Area – New York Times
• This Year Could Reverse the Slide for Housing and Auto Industries – Bloomberg
• Explaining the U.S. Urban Housing Shortages – Wall Street Journal
• Fed Says Student Debt Has Hurt the U.S. Housing Market – Wall Street Journal
• The Housing Affordability Crisis: The Role of Anti-Sprawl Policy – Cascade Policy Institute
• US real estate: changing the way New York is built – Financial Times
• Expected Gains in Remodeling Spending to Slide Lower in 2019 – Harvard Joint Center for Housing Studies

On other countries:

• [Australia] The Australian Dream Died Alone in an Apartment – Bloomberg
• [Latvia] Latvia’s house price rises decelerating – Global Property Guide
• [Netherlands] Amsterdam Houses Head for Record Prices – Bloomberg
• [Romania] Romania’s housing market is losing steam again – Global Property Guide
• [Spain] Spain’s house prices continue to rise modestly – Global Property Guide
• [Taiwan] Taiwan’s house prices almost steady – Global Property Guide
• [United Kingdom] Why the housing ladder doesn’t exist anymore – Financial Times

From a new IMF working paper by Barry J. Eichengreen, Asmaa A ElGanainy, Rui Pedro Esteves, Kris James Mitchener:

“We consider public debt from a long-term historical perspective, showing how the purposes for which governments borrow have evolved over time. Periods when debt-to-GDP ratios rose explosively as a result of wars, depressions and financial crises also have a long history. Many of these episodes resulted in debt-management problems resolved through debasements and restructurings. Less widely appreciated are successful debt consolidation episodes, instances in which governments inheriting heavy debts ran primary surpluses for long periods in order to reduce those burdens to sustainable levels. We analyze the economic and political circumstances that made these successful debt consolidation episodes possible.”

From the Federal Reserve Bank of New York:

“A decade after the financial crisis, the U.S. mortgage finance system remains largely untouched by legislative reforms. Policy deliberations have focused on Fannie Mae and
Freddie Mac—the two enormous government-sponsored enterprises (GSEs) that were placed into federal conservatorship in September 2008. The conservatorships were initially thought of as a temporary arrangement during which U.S. mortgage markets could be stabilized and function as intended, while providing time for Congress to consider the appropriate long-term federal role in the secondary mortgage market. To date, however, legislators have yet to resolve some basic issues: Should government guarantees continue to be available for a large swath of loans? If so, what types of institutions should have direct access to guarantees and how would their access be facilitated and regulated?

This special issue of the Federal Reserve Bank of New York’s Economic Policy Review presents a set of articles that developed from presentations given at “The Workshop on the Appropriate Government Role in U.S. Mortgage Markets,” held at the Bank on April 27-28, 2017. The workshop was organized in association with the Board of Governors, the Federal Reserve Bank of Atlanta, the Anderson School of Management at the University of California–Los Angeles, and the Wharton School of the University of Pennsylvania. We emphasize at the outset that the opinions expressed in the articles are those of the authors and do not necessarily reflect the views of any of the organizing institutions. In this introduction, we provide some context for the workshop and highlight the articles’ key findings.”

Introduction
W. Scott Frame and Joseph Tracy

GSE Guarantees, Financial Stability, and Home Equity Accumulation
Wayne Passmore and Alexander H. von Hafften

The FHA and the GSEs as Countercyclical Tools in the Mortgage Markets
Wayne Passmore and Shane M. Sherlund

Pricing Government Credit: A New Method for Determining Government Credit Risk Exposure
Brent W. Ambrose and Zhongyi Yuan

Peas in a Pod? Comparing the U.S. and Danish Mortgage Finance Systems 
Jesper Berg, Morten Bækmand Nielsen, and James Vickery

Credit Risk Transfer and De Facto GSE Reform 
David Finkelstein, Andreas Strzodka, and James Vickery

Credit Risk Transfer, Informed Markets, and Securitization
Susan M. Wachter

Housing Affordability: Recommendations for New Research to Guide Policy 
Jane Dokko

Long-Term Outcomes of FHA First-Time Homebuyers
Donghoon Lee and Joseph Tracy

A new working paper by Nida Cakir Melek, Michael Plante, Mine K. Yucel:

“We examine the implications of the U.S. shale oil boom for the U.S. economy, trade balances, and the global oil market. Using comprehensive data on different types of crude oil, and a two-country general equilibrium model with heterogenous oil and refined products, we show that the shale boom boosted U.S. real GDP by 1 percent and improved the oil trade balance as a share of GDP by more than 1 percentage points from 2010 to 2015. The boom led to a decline in oil and fuel prices, and a dramatic fall in U.S. light oil imports. In addition, we find that the crude oil export ban, which was in place during a large part of this boom, was a binding constraint, and would likely have remained a binding constraint thereafter had the policy not been removed at the end of 2015.”