Great Recession happened in December 2007, where millions of people lost their job, house prices going down, people started looking at how to fix your credit, and economies went downhill. But did you know that some recession proof industries not just survived but somehow thrive during those unfortunate times compared to the negative impact it …
When the Class of 2009 entered college in 2005, they had good reason to be optimistic. The economy appeared to be healthy, and a college degree commanded higher wages. College, of course, is expensive. And almost 2 out of 3 students entering college took on some debt. They took on that debt believing that it …
Our last post showed the recovery in GDP since the Great Recession has been abysmal, and we argued that it is a mystery that requires some deep thought and additional research. Let’s go a bit further into the GDP data to try to figure out what is going on. Breaking out the GDP components is always a …
Several recent articles have noted a sharp rise in the price of renting an apartment or house across the United States. Many have also argued that the rise in rents disproportionately affects lower and middle class renters. We decided to take look by examining the great data available on rents from Zillow. The chart below shows general …
So both John Cochrane and Martin Wolf are advocating 100% reserve banking. If these two agree on anything, it’s worth taking seriously! (It’s pretty amazing how advocates for narrow banking come from across the political spectrum.) We have some thoughts on banking and private money creation, but you’ll have to read our book to figure out what they are. Instead, we …
Exactly a year ago from today, one of us wrote a short piece entitled “Will Housing Save the U.S. Economy?” The conclusion was pessimistic: “we need to temper our optimism on what a housing recovery can do. I agree that house prices will continue to rise and new residential construction will steadily increase from its current very …
As we mentioned in our post yesterday, economists care much more about inequality in well-being rather than inequality in income or wealth. Data on well-being are more difficult to gather, but we discussed some evidence that inequality in consumption also increased from 1980 to 2010. Consumption directly affects the utility of an individual in most economic models. Income does not. Here is some …
There has been a lot of attention on income and wealth inequality in the past few years. But should we care about income and wealth inequality? Presumably we care because we believe that increases in income and wealth inequality lead to higher inequality in outcomes such as consumption, health, or overall well-being. In economics, it …
Great reads from Nick Timiraos over at the Wall Street Journal: Five Questions on the State of Mortgage Lending Mortgage Lenders Ease Rules for Home Buyers in Hunt for Business His central point is that the mortgage market is starting to direct credit toward lower credit quality buyers. We still think that the mortgage market …
In a series of speeches, Federal Reserve Governor Jeremy Stein emphasized the importance of financial stability concerns in monetary policy-making. But how does one measure whether threats to financial stability are lurking? Put differently, can we know that there is a credit bubble about to burst? In his speeches, Stein cites the work of two Harvard Business School …
