In the EJ: There is strong evidence that house prices and consumption are synchronised. There is, however, disagreement over the causes of this link. This study examines if there is a wealth effect of house prices on consumption. Using a household-level panel data set with information about house ownership, income, wealth and demographics for a […]
In a great interview, Dani Rodrik asks why You get trade theorists who have built their entire careers on “anomalous” results who are at the same time the greatest defenders of free trade. …the minds of analytically sophisticated [economists] turn into mush when they are forced to take seriously the policy implications of their own […]
Matt loves to talk about multiple equilibria and how changing expectations can shift us between Pareto-ranked equilibria. It turns out he’s not the only one who thinks it’s an important matter in the current environment. Here is Olivier Blanchard discussing recent developments in the implementation of monetary policy. In a world of multiple equilibria, announcements […]
We’ve talked a bit about the costs of unemployment recently and that discussion lead me to re-read Ken Rogoff’s letter to Joe Stiglitz from 2002. It’s clear in the letter than Rogoff is enraged with Stiglitz criticism of the IMF, but also with his arrogance and the potential consequences for vulnerable people. He’s right to […]
The Economist this week explores the political divide between the North and South of the UK: the North belongs to Labour and the South to the Tories. Unfortunately, they are unable to pinpoint the reason for the divisions, saying that “even controlling for factors such as education level, housing tenure, benefit receipts, local unemployment rates […]
Chris Blattman: Most papers that show “history matters” try to convince us of some general theory of development from their very specific case study. We like our papers to tell us that the world is systematic and the forces of development are deterministic. Judging by the paucity of papers that say so, however, we don’t […]