Today, we present a guest post written by Jeffrey Frankel, Harpel Professor at Harvard’s Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers. A shorter version appeared in Project Syndicate.
Category Archives: housing
Q3 GDP
The Bureau of Economic Analysis announced yesterday that U.S. real GDP grew at a 2.9% annual rate in the second quarter. That’s below the historical average U.S. growth rate of 3.1% per year. Even so, this was the best report in the last two years.
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Are stocks and housing off on another bubble?
As a new year gets under way [Nobel Laureate Robert] Shiller fears that advanced economies could be on the cusp of another stock market and property bubble that could end in tears….
“I’ve tried to inquire why we are having these booms right now at a time of so-called secular stagnation with low interest rates, and arrived at the thought that low interest rates are promoting these bubbles.”
Links for 2015-10-18
Quick links to a few items I found interesting.
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Current economic conditions
The Bureau of Economic Analysis announced today that U.S. real GDP grew at a 2.3% annual rate in the second quarter. You can’t describe the new data as favorable, but I’m still hopeful about what comes next.
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Ten years of Econbrowser
Last week marked the tenth anniversary of Econbrowser. That gives me an occasion to talk a little about why I started the blog and what we’ve accomplished with it.
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Winding down Fannie and Freddie
From the Daily Herald:
Speaking Tuesday in Arizona, President Obama endorsed the bipartisan efforts of [Senator Bob Corker (R-TN) and Senator Mark Warner (D-VA)] to wind down Fannie Mae and Freddie Mac as a first step in making certain that the nation does not suffer again through a housing finance crisis.
“For too long, these companies were allowed to make big profits buying mortgages, knowing that if their bets went bad, taxpayers would be left holding the bag,” Obama said in Phoenix. “The good news is that there’s a bipartisan group of Senators working to end Fannie and Freddie as we know them. I support these kinds of efforts.”
Let me explain why I also endorse these recommendations.
How Fannie Mae made its profit
Mortgage buyer and insurer Fannie Mae was in the news again this week.
Understanding the housing bubble
A key reason that I was insufficiently worried in 2005 about bad mortgage loans being made at the time was that the people who funded the loans– most importantly, the packagers and buyers of private-label mortgage-backed securities– had more motivation and resources to evaluate the risks accurately than I did. That they made an incredibly costly mistake is now indisputable. But the question remains, why?
GDP falling again
The BEA released today its estimate of 2012 fourth-quarter real GDP, which declined slightly from the third quarter. How scary is that?