The Unassuming Economist

From a paper by Yoosoon Chang, Soyoung Kim, and Joon Y. Park:

“This paper investigates the interactions between macroeconomic aggregates and income distribution
by developing a structural VAR model with functional variables. With this novel empirical approach, we are able to identify and analyze the effects of various shocks to the income distribution on macro aggregates, as well as the effects of macroeconomic shocks on the income distribution. Our main findings are as follows: First, contractionary monetary policy shocks reduce income inequality when focusing solely on the redistributive effects, without considering the negative impact on aggregate income levels. This improvement is achieved by reducing the number of low and high-income families while increasing the proportion of middle-income families. However, when the aggregate income shift is also taken into account, contractionary monetary policy shocks worsen income inequality. Second, shocks to the income distribution have a substantial effect on output fluctuations. For example, income distribution shocks identified to maximize future output levels have a significant and persistent positive effect on output, contributing up to 30% at long horizons and over 50% for the lowest income percentiles. However, alternative income distribution shocks identified to minimize the future Gini index do not have any significant negative effects on output. This finding, combined with the positive effect of output-maximizing income distribution shocks on equality, suggests that properly designed redistributive policies are not subject to the often-claimed trade-off between growth and equality. Moreover, variations in income distribution are primarily explained by shocks to the income distribution itself, rather than by aggregate shocks, including monetary shocks. This highlights the need for redistributive policies to substantially alter the income distribution and reduce inequality.”

From a paper by Puneet Vatsa:

“I use a structural vector autoregression model to analyse the links between oil prices, petrol prices, inflation, inflation perceptions, and inflation expectations in New Zealand. Findings reveal that although inflation expectations are sensitive to shocks to oil prices, petrol prices, and inflation itself, they are considerably more sensitive to inflation perception shocks. Shocks to inflation perceptions explain 54% of the forecast error variance in inflation expectations after one quarter and 37% after 18 months. The results underscore the importance of including inflation perceptions in models seeking to account for inflation expectations and their associations with energy prices.”

On cross-country:

• Global real house prices decline. Global house prices declined by 1.6% year on year in real terms during the third quarter of 2024. – BIS
• Global Residential Market Report Q3 2024 – Global Property Guide
• Africa’s Urbanisation Dynamics 2025. Planning for Urban Expansion – OECD
• Event: Knowledge Partner Session – Tackling Opacity in Real Estate Ownership: New Evidence and Solutions. Presented by Transparency International on March 26 – OECD
• What makes a housing boom? My 7 indicators that could help you pick a winner – Matusik Missive

Working papers and conferences:

• Not all Housing Cycles are Created Equal: Macroeconomic Consequences of Housing Booms – IMF
• How tightening mortgage credit raises rents and increases inequality in the housing market – VoxEU
• Some further thoughts on housing – Econlib
• Low-Tier Housing is a good investment, especially for homeowners. – Erdmann Housing Tracker
• Impact of Institutional Owners on Housing Markets – SSRN
• Financial Technology and the 1990s Housing Boom – SSRN
• Knocking it Down and Mixing it Up: The Impact of Public Housing Regenerations – SSRN

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

• Housing market map: How much home insurance is expected to rise by 2055. Home insurance premiums are projected to rise by 634% in Orleans Parish and 590% in Miami-Dade County between 2025 and 2055. – Fast Company
• Are Homes Values About to Fall? It Depends on the Location. The supply of houses for sale is recovering much faster in some parts of the country than in others – Wall Street Journal
• Inflation Adjusted House Prices 1.0% Below 2022 Peak. Price-to-rent index is 7.7% below 2022 peak – Calculated Risk
• Freddie Mac House Price Index Increased in January; Up 3.9% Year-over-year. 6 of the 10 cities with largest price declines are in Florida! – Calculated Risk
• US Home Price Insights –  March 2025 – CoreLogic
• House Price Appreciation by State and Metro Area: Fourth Quarter 2024 – NAHB
• Mortgage Rates Ease Slightly in February Amid Economic Uncertainty – NAHB
• US pending home sales tumble to record low in January – Reuters
• January 2025 Regional New Home Sales and Inventory – Erdmann Housing Tracker
• Final Look at Local Housing Markets in January and a Look Ahead to February Sales – Calculated Risk
• Americans delay home improvements in latest blow to US housing market. High interest rates and uncertainty over immigration policy discourage homeowners from selling or renovating properties – FT
• Multifamily Completions Rise Again Pushing Absorption Rates Lower – NAHB
• January Private Residential Construction Spending Dips – NAHB
• Housing market watch: States where housing inventory just spiked. ResiClub analyzed the February 2025 housing inventory data just released from Realtor.com. Here’s what it shows. – Fast Company
• HBGI Q4 2024: Single-Family Construction Ends Year with Growth – NAHB
• Are ICE raids impacting the housing market? Here’s what homebuilders say. Just 11% of homebuilders surveyed say that recent deportations and changes in immigration policy have impacted their labor force so far. – Fast Company
• 42% More Supply than Last Year! – Arizona Real Estate Notebook
• Fannie and Freddie: Single Family Serious Delinquency Rates Increased in January. Fannie Mae Multi-Family Delinquency Rate Highest Since 2011 (ex-Pandemic) – Calculated Risk
• California, Illinois, Florida and New York City Area Lead Housing Markets Facing Greater Risk of Downturns – ATTOM
• Revealed: America’s Hottest Housing Markets—and Why Some Buyers Are Happily Paying Over Asking in These Popular Spots – Realtor.com 

On the US—other developments:    

• During The Pandemic, Relatively Fewer Land-Use Restrictions In Some Markets Created Pockets of Housing Affordability – Zillow
• Learning from the first (and only) manufactured housing boom. Economist James Schmitz Jr. sees factory-made homes as the only substantial way to supply more affordable housing – Minneapolis Fed
• Cracking the Code. One man’s quest to fix the way we build. – Slate
• The War on HUD Will Make Housing Even Less Affordable. Americans are irate about high rents as well as sprawling homeless encampments. Slashing the housing agency won’t help any of it. – Bloomberg
• Homebuilders Warn of Rising Building Costs as Trump’s Tariffs on Canada and Mexico Take Effect – Realtor.com
• How Trump’s Policies Could Make the Housing Market Even More Unaffordable. Tariffs and worker deportations threaten to make home prices more expensive, pushing homeownership out of reach for millions. – Barron’s
• US housing to get a bit more affordable this year, but mainly due to lower rates: Reuters Poll – Reuters  
• Event: Exploring Challenges and Opportunities in the Secondary Market for Multifamily Affordable Housing Loans Originated by CDFIs on May 2 – New York Fed
• Trump’s tariffs could be another hit to Seattle-area housing affordability – The Seattle Times
• How Much is the U.S. Housing Market Worth? – Wealth of Common Sense
• Federal Workers Fired by Elon Musk’s DOGE Live in These Cities: Here’s How the Housing Market Is Responding – Realtor.com
• Trump’s ‘Gold Card’ Set Off Panic in an Unexpected Place: Real Estate. The president initially said his $5 million green card alternative would replace a visa for foreign investors that has become a favorite financing tool of major developers. – New York Times
• Housing market map: How much home insurance is expected to rise by 2055. Home insurance premiums are projected to rise by 634% in Orleans Parish and 590% in Miami-Dade County between 2025 and 2055. – Fast Company
• Rising property insurance costs stress multifamily housing. Minneapolis Fed survey finds that owners of multifamily rental housing are struggling to make ends meet as property insurance premiums increase and insurance coverage shrinks – Minneapolis Fed
• Inadequate Shelter: Millions of U.S. Homes Fail to Meet Standards – NAHB

On China:

• Will China’s economy follow the same path as Japan’s? Since the 2021 bursting of its real-estate bubble, worries have grown that China’s future economic trajectory will mirror that of Japan in the 1990s – Bruegel
• China’s New-Home Sales Steady on Continued Policy Support – Bloomberg

On Australia and New Zealand:

• [Australia] Australian’s housing market ends downturn as rate cut lifts sentiment, CoreLogic data shows – Reuters
• [Australia] Australian House Prices Rebound in February, Spurred by Rate Cut – Bloomberg
• [Australia] Housing woes are hurting our living standards. Australia’s big housing problem is contributing to our stagnating living standards and sluggish real incomes. – Financial Review

On other countries:  

• [Austria] Austria’s Residential Property Market Analysis 2025 – Global Property Guide
• [Canada] Solving the housing crisis is a marathon not a sprint. Solving the crisis can go faster, but will require that we change the way we build housing. – CMHC
• [Canada] Developers find new opening to bet on Canada’s housing shortage – Bloomberg
• [Canada] Toronto Home Sales Slump 29% as Economic Uncertainty Ramps Up. Prices in Canada’s biggest city fell for a third month. Some buyers are using a ‘wait-and-see’ approach, analyst says – Bloomberg
• [Finland] Finland’s Residential Property Market Analysis 2025 – Global Property Guide
• [France] France’s Residential Property Market Analysis 2025 – Global Property Guide
• [Germany] Germany’s PBB warns of slow recovery in property market as profit drops – Reuters
• [Hong Kong] Hong Kong lived-in home prices fall to lowest point in 8 years in January. Some analysts express optimism that prices would bottom out in the first half of the year – South China Morning Post
• [Hong Kong] Hong Kong home prices soften for a second month in January – Reuters
• [Italy] Italian Housing Market Survey. Short-term Outlook – 2024 Q4 – Central Bank of Italy
• [Ireland] Is the answer to Ireland’s housing crisis more apartments? The country is full of half-empty three and four-bed detached homes, chief executive of Cairn Homes Michael Stanley says – The Irish Times
• [Ireland] Ireland’s Residential Property Market Analysis 2025 – Global Property Guide
• [Mexico] Mexico’s Residential Property Market Analysis 2025 – Global Property Guide
• [Saudi Arabia] High property prices squeeze Saudis out of homeownership – Semafor
• [Singapore] Singapore’s World Famous Public Housing System Is Strained by an Overheated Market – Bloomberg
• [Switzerland] Swiss Face Rent Cuts as Mortgage Benchmark Drops to 2023 Level – Bloomberg  
• [Thailand] Thailand’s Residential Property Market Analysis 2025 – Global Property Guide  
• [United Kingdom] UK house prices rise by more than expected, Nationwide says – Reuters
• [United Kingdom] UK house prices rise more than expected in February. Average cost of £270,493 is 3.9% higher year on year as buyers try to get ahead of stamp duty changes in April – FT
• [United Kingdom] UK House Price Growth Picks Up in February, Nationwide Says. Average price of a home rises 0.4% to more than £270,000. Property market is defying wider economic slump and tax hikes – Bloomberg 
• [United Kingdom] UK Mortgage Approvals Hold Steady in Race to Beat Tax Hike. Buyers are trying to tie up deals before stamp duty increases. Consumer credit surges but households still inclined to save – Bloomberg
• [United Kingdom] UK Housing Market Set for 2025 Recovery, Building Suppliers Say – Bloomberg

From a paper by Guilherme Spinato Morlin, Marco Stamegna, and Simone D’Alessandro:

“The surge in energy prices following the Russian-Ukrainian conflict triggered the most significant inflation in advanced economies in recent decades. Using the Eurogreen model for the Italian economy, we examine the macroeconomic and distributional impacts of rising energy prices alongside two policy measures: wage indexation and a temporary housing rent cap. We compare policy scenarios with a baseline reflecting the observed price shocks. We find that: i) energy price shocks disproportionately affect lower-income individuals due to the larger share of energy goods in their consumption baskets; ii) wage indexation results in higher average real wages compared to the baseline scenario, without triggering inflation acceleration, while temporarily boosting output and employment by supporting aggregate demand; iii) a temporary housing rent cap improves distribution in workers’ favor while reducing inflation; iv) both policies have a more substantial effect for low-skilled workers; and v) best outcomes appear when these policies are jointly implemented.”

From a paper by Emrehan Aktuğ and Abolfazl Rezghi:

“Using a large cross-country dataset covering over 150 countries and more than 10
macroeconomic variables, this study examines the consistency of IMF World Economic Outlook (WEO)
forecasts with the full information rational expectations (FIRE) hypothesis. Similar to Consensus Economics
forecasts, WEO forecasts exhibit an overreaction to news. Our analysis reveals that this overreaction is
asymmetric, with more measured response to bad news, bringing forecasts closer to the FIRE benchmark.
Moreover, forecasts align more closely with FIRE hypothesis during economic downturns or when a country is part of an IMF program. Overreaction becomes more pronounced for macroeconomic variables with low persistence and for forecasts over longer horizons, consistent with recent theoretical models. We also develop a model to explain how state-dependent nature of attentiveness may drive this asymmetric overreaction.”