tag:blogger.com,1999:blog-2546602206734889307.post1926769749422899228..comments2024-03-28T04:29:22.717+00:00Comments on mainly macro: House prices, consumption and aggregationMainly Macrohttp://www.blogger.com/profile/09984575852247982901noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-2546602206734889307.post-141869551819611332013-07-05T19:28:05.821+00:002013-07-05T19:28:05.821+00:00True, they are no Unités d'Habitation. They lo...True, they are no Unités d'Habitation. They look like giant battery hen houses, but they are not Pruitt Igoes either. Strong communities have formed, with which Architects for Peace have worked, and they have generous swathes of green space around them, integral to the original model. <a href="http://www.mcgrath.com.au/buy/house-abbotsbury-nsw-2176/185472/?preview=1" rel="nofollow">abbotsbury</a><br />nadiahttps://www.blogger.com/profile/14501889118271650360noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-50999340031395024702012-08-19T06:26:15.892+00:002012-08-19T06:26:15.892+00:00Not exactly on-topic, but I was just browsing old ...Not exactly on-topic, but I was just browsing old economics papers and came across "Supply and Demand," 1922, by Hubert Henderson with an introduction by Keynes. I was struck by Keynes' statement (true, at least until the 1950s) re economics "Nor is there any branch of knowledge in the formation of which Englishmen can claim a more predominant part." How strange it seems that his own contribution, one of the greatest intellectual achievements and most paradigm changing by an Englishman since Newton, would hold so little sway in England at this time when it is so relevant. Your blog seemed the right place to post the observation.DrJimnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-87014682686332111352012-08-16T13:55:09.269+00:002012-08-16T13:55:09.269+00:00Yep. But this generalises, to all assets, real and...Yep. But this generalises, to all assets, real and financial, and all goods. At the macro-level a price change never has wealth (income) effects; it only has distribution effects (and substitution effects, of course).<br /><br />But then you have to ask: "what caused the price change?". Because whatever it is that caused the price to change may itself have wealth (income) effects.Nick Rowehttps://www.blogger.com/profile/04982579343160429422noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-10930115220557620422012-08-16T11:03:24.243+00:002012-08-16T11:03:24.243+00:00Slightly left field but are we missing the bigger ...Slightly left field but are we missing the bigger impact of the stock market which has had an impact on consumption of twice that of housing.<br /><br />http://www.adsanalytics.com/dashboard/docs/dashboard.php?treepage=tree_definition_main.php&chart=chart_hh_spADS Analyticshttps://www.blogger.com/profile/04473954593289487032noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-39780463218101111642012-08-16T10:40:23.911+00:002012-08-16T10:40:23.911+00:00May I suggest, humbly, that albeit the young tend ...May I suggest, humbly, that albeit the young tend to smooth consumption according to the lifecycle theory they also tend to multiply, and thus consume for more then one person; whereas chances for the old to multiply are, well, close to nill normally. That is to say, guess one may look at the effect of house prices on household formation to try to resolve that puzzle of yours....?Paolonoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-74353055613793520302012-08-16T08:41:54.555+00:002012-08-16T08:41:54.555+00:00Good analysis, but is this correct:
“Higher house...Good analysis, but is this correct:<br /><br />“Higher house prices are great for the old, and bad for the young, but there is no aggregate wealth effect.”<br /><br />Given that the (risk adjusted) expected value increase in an asset is equal to the interest rate, it does not matter if the price you have to pay is 10 or 10.000 $ (but the price path might have to be stepper under the second price if you are forced to expose yourself a lot towards this single asset).<br /><br />Given that the expected return on the major capital asset, houses, is in equilibrium with other types of capital before and after a devaluation in housing prices – doesn’t this mean that owners of the asset will face a negative wealth effects while people who do not own it remain unaffected (unless the economy crashes).<br />neminoreply@blogger.com