Fed Chair Ben Bernanke’s observations on monetary policy and the housing bubble have received a lot of attention. Like many other commentators (e.g., Arnold Kling, Paul Krugman, and Free Exchange), I agree with Bernanke’s conclusions, but only up to a point.
Category Archives: housing
What went wrong and how can we fix it?
That’s the title of an article I wrote for the UCSD Economics Department’s Economics in Action, which I reproduce below.
Should the Fed be the nation’s bubble fighter?
That’s a question recently taken up by
the Wall Street Journal. Here are my thoughts.
Anemic recovery
Recent indictors continue to support the impression that we’re in the midst of a weak economic recovery.
Factors in local house price declines
UCSD Ph.D. candidate Sam Dastrup has completed a very interesting study with his advisor Professor Richard Carson of what accounts for differences across U.S. communities in the magnitude of the decline in real estate prices that we’ve seen over the last several years.
Home prices stabilized, but…
The S&P/Case-Shiller home price indices registered another month of increase in July. That’s a critical bit of favorable news, since continued declines in home prices would mean further increases in default rates and new stresses on financial institutions.
Guest Contribution: Reforming Banking by Reforming Housing
By Simon van Norden
Today, we’re fortunate to have Simon van Norden, Professor of Finance at HEC Montréal (École des Hautes Études Commerciales), continue as a guest contributor.
In my previous post, I wrote about some of the evidence linking serious banking crises to real estate market collapses. That evidence is far from iron clad; it is simply the observation that many banking crises in mature economies have their origins in a real estate boom and bust cycle. However, the idea is also intuitively appealing.
Econbrowser Emoticon shifts to neutral
| Date | Status |
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Sep 13, 2006 |
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| Feb 21, 2007 | 
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| Apr 25, 2007 | 
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| Jun 27, 2007 |
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| Oct 5, 2007 |
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| Jan 4, 2008 |
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| Aug 30, 2009 |
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If you’ve only been following Econbrowser since 2008, you may have thought that the crabby countenance in the upper-right corner of our main page was a permanent fixture, conveying our general grumpiness about the state of the economy or perhaps life in general. Despite having been stuck in the pessimistic mode for quite some time now, the emoticon was in fact always intended to be a dynamic feature, adjusted from time to time to provide readers with our overall impression of incoming data. The table on the left provides links to each occasion that our Little Econ Watcher’s countenance has changed in the past.
Last week’s data persuaded me to move the Econbrowser Emoticon back into neutral, signifying that I now judge overall output to be growing slowly rather than declining. Here are details on the evidence that prompted this change in assessment, and what it signifies.
Good news on house prices
I was happy and surprised to see that the nominal
S&P/Case-Shiller seasonally adjusted Home Price Index rose by 0.75% in June for a composite of 20 U.S. metropolitan areas.
Paying for design flaws
Updates on what this is going to cost you and me.