The Unassuming Economist

From a paper by Radek Dědeček:

“This paper examines the influence of cross-border capital flows on income inequality in both origin and recipient countries. Using bilateral flow data and a panel dataset spanning 63 countries from 2005 to 2018, we employ panel regression analysis to investigate the effects of different types of capital. Our findings indicate that FDI inflows reduce income inequality in advanced countries by creating jobs and raising wages in sectors that employ lower-income individuals. Conversely, in developing countries, FDI often targets capital-intensive and high-skilled industries, increasing inequality. Portfolio investments generally increase inequality by driving up asset prices and creating instability, but can decrease inequality in emerging markets by supporting financial inclusion and reducing government financing costs. Specific scenarios, such as investments in tax havens or differences in human capital, show distinct results. Policymakers should regulate international capital flows through financial regulations, progressive taxation and international cooperation to mitigate their impact on income inequality.”

From a paper by Behnaz Minooei Fard and Willi Semmler:

“In some academic and policy circles, carbon pricing, generally in the form of Cap & Trade or carbon taxes (see Metcalf and Stock (2020)), is often seen as a key strategy for tackling climate change and its associated risks. Others support directed technical change and direct investments in cleaner energy sources (see Acemoglu et al. (2012) and Aghion et al. (2022)). One can design theoretical and model-guided strategies and efficient or optimal paths to decarbonization of the economy. Politically, however, one of the most important issues is that significant behavioral constraints exist in actual policymaking. This paper provides an overview and survey of the strengths and weaknesses of either side of the decarbonization strategy and the role of behavioral drivers toward a low-carbon economy, assessed from the macro-and microeconomic perspectives.”

From a paper by Nigel Meade and Ciaran Driver:

“Policy makers are concerned with the accuracy of GDP forecasts and want to understand the reasons for the revision of forecasts. We study these issues by examining forecasts of annual UK GDP growth by a panel of agents, published monthly by HM Treasury. We focus on two main issues: the developing accuracy of the group-mean forecast as horizons shorten and the identification of information categories underlying agents’ forecast revisions. The accuracy of the group-mean forecast is poor; there is evidence of information rigidity in forecasts within the target year, and accuracy only improves in May of the target year when contemporary information flows lead to increased accuracy. We find a pessimism bias; the median errors of group-mean forecasts are increasingly positive for horizons shorter than 17months. We seek to explain revisions to both long- and short-horizon group-mean forecasts and individual agent forecasts. Modeling individual agents’ forecast revisions using a moving window, we note a consistent tendency by agents to revise their forecast towards the group-mean. Although their importance varied over time, the main information categories explaining revisions were, over longer horizons, the cost of finance, production, and a business confidence indicator. FX rates and inflation were influential over shorter horizons.”

On cross-country:

• Global house prices declined in real terms by 0.8% year on year (yoy) in Q2 2025, slightly less compared with the previous quarter (–1.0%). – BIS
• Where house prices are rising fastest globally – Global Property Guide
• European progressives must tackle housing crisis to beat far right, say researchers. Centre left can win broad support by addressing soaring house prices and rents, according to data analysis – The Guardian
• Commissioner Jørgensen welcomes recommendations by the Housing Advisory Board on how to tackle the housing crisis – European Commission
• New Housing in Europe publication out now – Eurostat
• Real estate investment: micro-apartments as a housing trend. Micro-apartments: the smart housing trend – compact and profitable. Ideal for urban lifestyles, they offer investors high rental income but also come with risks such as higher management costs and vacancies. – UBS

Working papers and conferences:

• The Mortgage Debt Channel of Monetary Policy when Mortgages are Liquid – University of Chicago
• “Giving Up”: The Impact of Decreasing Housing Affordability on Consumption, Work Effort, and Investment – SSRN
• Market segmentation and housing prices. Did relaxed credit standards drive the housing boom that led to the Great Recession? – American Economic Association
• The Global Value of Cities – NBER
• The Spatial Distribution of Income in Cities: New Global Evidence and Theory – NBER
• How spatiotemporal urban expansion shapes heat trends in coastal megacities: Developed vs. developing nations – Urban Climate

On China:

• Why China Can’t Sort Out Its Property Market Mess – Bloomberg

On Australia and New Zealand:

• [Australia] ‘I would just like to see more people housed’: inside NSW’s social housing changes – The Guardian
• [Australia] Australia Caps Risky Loans as Home Prices and Credit Surge – Bloomberg
• [Australia] Australia Building Activity Jumps in Race to Ease Housing Stress – Bloomberg
• [New Zealand] NZ’s housing funk sows doubts on reliable investment strategy, drags on economy – Reuters

On other countries:  

• [Canada] Ontario’s housing affordability crisis extends far beyond Toronto – Fraser Institute
• [Denmark] Danish Home Price Spike Puts Central Bank on Alert for Stability – Bloomberg
• [Hong Kong] Momentum builds: ‘bigger’ Hong Kong property rebound forecast for 2026. Resurgent stock market helps steer secondary home prices to 14-month high as rent index maintains historical peak – South China Morning Post
• [Hong Kong] Three Arrested as Hong Kong Fire Death Toll Rises to at Least 65. Officials said firefighters extinguished fires in four towers of a high-rise complex, and blazes in three others were effectively under control – Wall Street Journal
• [Portugal] Housing crisis creates “new social challenges” in Portugal – European Commission – ENR
• [Switzerland] Swiss regulator warns mortgage risks are rising as banks stretch lending rules – Reuters
• [United Kingdom] Mortgage brokers say house buying at risk from surveyor ‘down valuing’. London and the south-east said to be worst affected, with valuations often coming in at 10% below the agreed sale price – The Guardian
• [Vietnam] Surging Property Prices Draw Bidders for Derelict Vietnam Towers – Bloomberg

From a paper by Jérôme Creel and Jonas Kaiser:

“This paper introduces a novel application of the Updated Okun Method to estimate fiscal multipliers. By leveraging Okun’s Law to compute potential output and the output gap, we construct a new measure of the fiscal stance that improves transparency and interpretability. Applying this approach to France and Italy, we find that both economies were operating below full potential for most of the sample period, and that fiscal policy was more contractionary than standard estimates suggest. Our analysis reveals significant differences in fiscal multiplier effects across the two countries, with evidence of state-dependence in France, where fiscal policy is more effective during periods of economic slack, while no such variation is observed for Italy. These findings underscore the importance of aligning fiscal policy with economic conditions, particularly in the context of public debt sustainability debates.”