The Unassuming Economist

From a paper by Samina Iqbal, and Muhammad Faisal Khan:

“Inflation targeting (IT) has emerged as a dominant monetary policy framework adopted by central banks to enhance price stability and macroeconomic credibility. This study empirically examines the impact of inflation targeting on macroeconomic performance, focusing on inflation control, output stability, and economic growth. Using cross-country evidence from inflation targeting and non-inflation-targeting economies, the analysis evaluates whether IT frameworks deliver superior macroeconomic outcomes. The findings suggest that inflation targeting is associated with lower inflation volatility and improved policy transparency, though its effectiveness depends heavily on institutional strength, fiscal discipline, and financial market development. The study contributes to ongoing policy debates by highlighting both the benefits and limitations of inflation targeting in emerging and developing economies.”

From a paper by Deepak Kushawaha, Abhishek Gorsi, Ankit Singh Kharwar & Abhishek Singh:

“This paper explores the impact of renewable energy (RE) generation on energy inflation in India using an ARDL model with data from 1974 to 2023. The findings show that RE generation has a significant long-term positive effect on energy inflation, probably due to the high initial infrastructure costs. These results challenge the divine coincidence hypothesis, suggesting that while RE helps cut emissions, it might also drive-up inflation. This analysis does not critique RE development but highlights the need for a nuanced understanding of its economic impacts. To counteract these inflationary pressures, policies should focus on increasing investments in RE research and development, implementing effective energy storage solutions, and upgrading grid infrastructure to balance economic growth, inflation control, and environmental sustainability.”

From a paper by Afees A. Salisu & Abeeb O. Olaniran:

“This study evaluates the predictability of energy uncertainty in relation to economic activity across the global and the large open economy of the United States. Two distinct objectives guide the research: first, to explore the nexus between energy uncertainty and economic activity using various metrics, and second, to examine how well energy uncertainty enhances the forecast performance of economic activity across three different benchmark models, including a random walk with and without drift, and a historical average. The analysis incorporates two lag structures to capture additional dynamics, ensuring a comprehensive understanding of the relationship between energy uncertainty and economic activity. Results indicate that heightened energy uncertainty generally stifles economic activity, although this effect weakens over a longer lag structure. This finding is consistent for both in-sample and out-of-sample forecasts, and remains robust even when certain fundamentals are incorporated as controls, highlighting the strength of the research. These findings hold significant implications for both micro- and macroeconomic perspectives, underscoring the potential contribution of this research to the field of economics. The implications for policymakers are particularly noteworthy, as they provide valuable insights for decision-making in the energy sector.”

On cross-country:

• Housing Europe President: the answer to a structural crisis caused by a market failure cannot be entrusted to the market itself. At the start of 2026, a year crucial for housing policy, Housing Europe’s President, Marco Corradi shares his thoughts on how we can guide Europe home. – Housing Europe
• Many Victorian cities grew by tenfold in a century. Could ours do the same? – The Works in Progress Newsletter

Working papers and conferences:

• Seminar: Competitive Human Capital Investment: Evidence from Housing Prices and Educational Expenditures on February 20 – Stanford University
• 5th Workshop on Residential Housing: Research Frontiers in Climate Risks and Affordability – University of Cambridge
• Creating High-Opportunity Neighborhoods: Evidence from the HOPE VI Program – NBER
• The Macroeconomic Effects of Neighborhood Policies: a Dynamic Analysis – NBER
• Housing Affordability and Housing Demand – San Francisco Fed

On China:

• China’s measures to shore up its indebted property sector – Reuters

On Australia and New Zealand:

• [Australia] Australia spends more on tax breaks for landlords than social housing, homelessness and rent assistance combined – The Guardian
• [New Zealand] New Zealand house prices hit 30-month low as buyers hold back – Bloomberg

On other countries:  

• [Canada] The numbers don’t lie: The housing crisis is not caused by a supply shortage. Financialization, not demographics, caused the cost of housing to explode – Canadian Centre for Policy Alternatives
• [Hong Kong] Hong Kong’s Housing Market Rebounds With Renewed City Buzz – Bloomberg
• [Korea] Apartment Prices Have Risen Every Single Week for a Year in Seoul. Seoul’s real estate rally is frustrating young workers who see the bottom rung of the property ladder float out of reach. – Bloomberg
• [Korea] Seoul Apartment Prices Rise Further Even as Lee Hardens Resolve – Bloomberg
• [Portugal] Brussels admits that Portugal is “one of the countries most affected” by the housing crisis in the EU. Brussels estimates that housing prices in Portugal are overvalued by 25%, the highest percentage in the European Union – ENR
• [Sweden] Erik Thedéen: Weak consumption and the housing market – causes and lessons learnt – Sveriges Riksbank
• [United Kingdom] London’s high land prices need ‘market adjustment’, says housing minister. Matthew Pennycook says far-reaching reform is needed to ‘get more volume out of the system’ and deliver more homes – FT
• [United Kingdom] Leaseholds and fleeceholds are a blot on the UK housing market. If more homes are to be built, the problem of rogue estate management companies has to be addressed – FT
• [United Kingdom] UK House Prices Rebound at Start of 2026, Nationwide Says – Bloomberg
• [United Kingdom] Santander launches 98% mortgage for first-time buyers. Move by one of the biggest UK lenders broadens options available to low-deposit borrowers – FT
• [United Kingdom] Who killed the British flat? The government needs to revive the appeal of flats — but capping ground rents at £250 a year won’t cut it – FT
• [United Kingdom] Demand for UK rental properties drops as buying becomes more affordable. Falling levels of immigration also reduce competition among tenants – FT

On prices, rent, and mortgage:    

• Trump’s Pick for Fed Chair Kevin Warsh Has an Unusual Plan To Lower Mortgage Rates – Realtor.com
• Mortgages won’t fix what ails housing. Economists keep repeating a message that nobody seems to want to hear: Financing gimmicks can’t solve a problem that’s fundamentally about math – Quartz
• Homeowners Are Falling Behind on Their Mortgages – Realtor.com
• Mortgage Applications Today: Demand Drops Again as Experts Blame Decline on Historic Winter Storms – Realtor.com
• Home Prices Five Years After Covid. Synchronicity and idiosyncrasy – Home Economics
• Trump: ‘I Want To Drive Housing Prices Up’. The president says he would rather increase prices for homeowners than drive prices down. – Reason
• Asking Rents Decline Year-over-year – Calculated Risk  

On sales, permits, starts, and supply:    

• Why Trump’s crackdown on big investors in housing may backfire. Curbing institutional ownership of single-family homes does not tackle the affordability crisis and could make things worse – FT
• The Housing Market Is Slumping—but Sales Over $10 Million Are Skyrocketing. The broader real-estate market has struggled under the weight of higher mortgage rates. Meanwhile, the high end is surging. – Wall Street Journal
• The Housing Market Is Swinging Toward Buyers. Nearly two-thirds of home buyers last year purchased at a discount to the original listing price, the highest proportion since 2019 – Wall Street Journal
• U.S. Population Growth Slows in 2025 – NAHB
• Will expanding the capital gains exclusion unlock housing supply? Evidence on who benefits – Brookings 
• Final Look at Housing Markets in December and a Look Ahead to January Sales. Altos: Active single-family inventory was down 0.2% week-over-week – Calculated Risk
• Atlanta City Limits. What’s preventing the metro from growing? – Home Economics
• Homeowners Are Holding on to Their Homes Longer Than Ever—Especially in Coastal States – Realtor.com  
• Home Builders Turn to White House for Help on Inventory Glut. Companies devising a plan for a federally backed ‘rent-to-own’ program to help reduce the biggest surplus of homes in many years – Wall Street Journal
• Fannie Mae Expands U.S. Rental Housing Supply Through Nearly $74 Billion in Multifamily Loan Production Volume in 2025 – Fannie Mae
• Why Trump’s crackdown on big investors in housing may backfire. Curbing institutional ownership of single-family homes does not tackle the affordability crisis and could make things worse – FT
• Are YIMBYs winning the housing wars? Not so fast, these people say. Supply skeptics contend housing affordability calls for government policies, not just market forces. – Washington Post

On other developments:    

• What Tearing Down Housing Projects Did for Kids. Bringing rich and poor together has major benefits. – The Atlantic
• Knocking down social housing helped poor children prosper. New research shows the impact of mixed-income developments – The Economist
• New research examines long-term effects of federal housing program from the ’90s – NPR   
• Housing (Un)affordability: New Reports Shed New Light on the Problem. I’m especially convinced that with better policy, we could improve our uniquely dismal construction productivity. – Jared Bernstein
• Trump’s Plan to Make Housing Affordable Is Faltering – Bloomberg
• Trump can still do more to address affordability. Tax cuts and deregulation will fuel growth and help lower home prices. – Washington Post
• Voters Say Housing Prices Are Too High. Trump Wants Them Higher. When President Trump said he wanted to drive housing prices up, not down, he was speaking to a conundrum that has flummoxed policymakers for decades. – New York Times
• Congress Targets Housing Crisis as Solutions Elude Trump. Bipartisan Senate and House packages, aimed at rewarding new construction and eliminating red tape, could bring significant changes to federal housing laws. – New York Times
• House Republicans eye next week for housing bill vote. The Housing for the 21st Century Act is part of a push by Congress to pass legislation that could address a growing housing affordability crisis. – Politico
• The contradictions of the housing affordability dilemma – Axios
• Why nobody really knows the scale of the U.S. housing crisis. Experts say the U.S. needs an additional 2 million to 20 million homes to fix the shortfall, underscoring the challenge of meeting the nation’s housing needs. – Washington Post
• Do More Deportations Mean Lower Housing Costs? The Trump administration says its crackdown on immigration is reducing housing prices. Economists say other factors such as oversupply matter more. – Wall Street Journal
• Bridging Rent and Ownership: Can the “Trump Homes” Proposal Fix America’s Housing Shortage? – The People’s Economist with Anthony Chan
• Affordable Housing Starts in the Labor Market – Bloomberg
• The hidden double standards driving our housing crisis. Apartments are safer and more affordable than single-family homes. Why do we treat them like a hazard? – Vox
• Housing Unaffordability Soared to New Highs in 2024 – Harvard Joint Center for Housing Studies
• Fannie and Freddie: Single Family Delinquency Rate Increased in December. Fannie Mae Multi-Family Delinquency Rate Near Housing Bust High – Calculated Risk
• Democrats knock Trump’s pledge to ‘drive housing prices up’ – The Hill
•  AI is Powering a Silicon Valley Housing Rebound. The areas gaining fastest are the ones where tech workers live – Home Economics
• U.S. Homeowner Equity Eases Slightly in Q4 2025 While Seriously Underwater Rates Stay Near Historic Lows – ATTOM
• Home Price Growth in Opportunity Zones Slightly Behind Rest of Nation in Second Quarter – ATTOM
• Homeownership Rate Inches Up to 65.7% – NAHB
• Black Gen Zers and Millennials Are Half As Likely to Own Their Home As White Counterparts – Redfin  
• The Millennial Homeownership Problem Is Mostly a Marriage Problem. Married Millennials who head their own households own at nearly the same rate as Boomers. There are just far fewer of them. – Home Economics