scholarly journals The Australian housing supply myth

2019 ◽  
Author(s):  
Cameron Murray
Keyword(s):  
Interest Rates ◽  
Opportunity Cost ◽  
Town Planning ◽  
State Governments ◽  
Housing Supply ◽  
Policy Changes ◽  
Economic Activities ◽  
Political Pressure ◽  
Balance Sheets ◽  
Price Effects

Australia’s expensive housing market is claimed to be primarily the result of a shortage of supply due to town planning constraints, leading to political pressure on councils and state governments to remove planning regulations, regardless of their planning merit. We argue that this supply story is a myth and provide evidence against three key elements of the myth. First, there has been a surplus of dwellings constructed compared to population demand, rather than a shortage. Second, planning approvals typically far exceed dwelling construction, implying that more approvals or changes to planning controls on the density and location of development cannot accelerate the rate of new housing supply. Third, large increases in the rate of housing supply would have small price effects relative to other factors, like interest rates, and come with the opportunity cost of forgone alternative economic activities. Indeed, if the story were true, then property developers would be foolishly lobbying for policy changes that reduce the price of their product and the value of the balance sheets, which mostly comprise undeveloped land.

scholarly journals The Response of Interest Rates to Unexpected Weekly Money: Are Policy Changes Important?

1990 ◽  
Vol 56 (3) ◽  
pp. 577 ◽  
Author(s):  
R. W. Hafer ◽  
Richard G. Sheehan
Keyword(s):  
Interest Rates ◽  
Policy Changes

The Political Manipulation of Macroeconomic Policy

1990 ◽  
Vol 84 (3) ◽  
pp. 767-795 ◽  
Author(s):  
John T. Williams
Keyword(s):  
Interest Rates ◽  
The United States ◽  
Real Income ◽  
Policy Cycle ◽  
Presidential Approval ◽  
Policy Changes ◽  
Macroeconomic Policies ◽  
Monetary Policies ◽  
Economic Forces ◽  
Party Differences

Conventional wisdom and some research indicate that macroeconomic policies follow cycles corresponding to political, as well as economic, forces. Using vector autoregression analysis, I test three models of monetary policy determination for the United States, 1953–1984: the electoral cycle model (that reelection motivations on the part of presidents create a policy cycle), the party differences model (that policy changes reflect revolving presidential party administrations), and the referendum model (that changes in presidential approval create, in effect, a continuing referendum, allowing presidents to monitor their success and change macroeconomic policies when necessary). Analysis shows that monetary policies, as measured by the monetary base and short-term interest rates, respond to the election cycle and presidential approval (although the effect on macroeconomic outcomes is ambiguous). Party differences are found in real income but are not very significant in other variables.

Trends of centre–state relations in India under the neo-liberal regime

2018 ◽  
Vol 5 (1) ◽  
pp. 83-91 ◽  
Author(s):  
Prabhat Patnaik
Keyword(s):  
Interest Rates ◽  
State Government ◽  
Central Government ◽  
The State ◽  
State Governments ◽  
Tax Rates ◽  
Economic Role ◽  
Goods And Services ◽  
Role Of The State ◽  
Financial Strength

India had been envisioned as a federation by our Constitution makers, and so states were assigned some important subjects in which the centre could have no or only limited authority. Thus state governments run by opposition parties could pursue policies different from those of the Central Government in a number of ways. But since the onset of economic ‘liberalisation’ beginning with the late 1980s the financial strength and economic role of the state governments have been constantly undermined. This came, first, through the raising of interest rates to attract foreign finance capital, which created budgetary crises for the states since they fell under heavy debt simply to pay interest on existing debt. Neo-liberal policies were then imposed on them by Finance Commissions which made compliance with these compulsory for centre’s financial assistance. More recently the states’ powers have been further curtailed by the Goods and Services Tax, which has deprived the state government of the power to determine tax rates on goods produced within the states. Another means to the same end has been the centre’s trade agreements with foreign countries, with no reference made to states whose products thereby may be priced out of the market. The demonetisation of 2016, which impacted so destructively on employment and the cooperative sector in the states, was also undertaken by the centre without any reference to the states.

Large US household balance sheets pose macro risks

2021 ◽  
Keyword(s):  
Interest Rates ◽  
Health Costs ◽  
Gdp Growth ◽  
Lower Growth ◽  
Content Type ◽  
Balance Sheets ◽  
Trade Growth ◽  
Productivity Gains ◽  
Macroeconomic Risks

Significance An examination of the factors behind the expansion indicates that outsized balance sheets will persist and will pose a number of macroeconomic risks. Impacts Slower workforce growth will pressure GDP growth, trade growth and long-term interest rates, unless productivity gains can offset this. A record number of US business deaths and births in 2020 will affect productivity and have unpredictable impacts on the economy. Lower growth makes it harder to stabilise debt-to-GDP ratios, just as pension and health costs rise as populations age in major economies.

scholarly journals The dangerous ineffectiveness of negative interest rates: the case of Switzerland

2019 ◽  
Vol 7 (2) ◽  
pp. 220-232 ◽  
Author(s):  
Sergio Rossi
Keyword(s):  
Interest Rates ◽  
Real Estate Market ◽  
Negative Consequences ◽  
Housing Crisis ◽  
Economic Activities ◽  
The Real Estate ◽  
Negative Interest Rates ◽  
The Real Estate Market ◽  
National Bank ◽  
Better Than

This paper argues that the negative interest rate adopted by the Swiss National Bank in 2015 has elicited a series of negative consequences across the Swiss economy. It has led an increasing number of agents to invest their savings in the real-estate market, whose prices have overheated, threatening the eruption of a housing crisis. It has also induced a number of financial institutions to turn to riskier businesses in an attempt to continue to earn some returns, thereby increasing financial fragility at systemic level. The paper suggests that a small Tobin tax on all Swiss-franc purchases may contribute to the support of domestic economic activities much better than negative rates of interest.

Cost-effective species conservation: an application to Huemul (Hippocamelus bisulcus) in Chile

2007 ◽  
Vol 12 (4) ◽  
pp. 535-551 ◽  
Author(s):  
CARLOS ADRIÁN SALDARRIAGA ISAZA ◽  
WALTER GÓMEZ BOFILL ◽  
HUGO SALGADO CABRERA
Keyword(s):  
Opportunity Cost ◽  
Species Conservation ◽  
Cost Effective ◽  
Land Allocation ◽  
Economic Activities ◽  
Time Period ◽  
Hippocamelus Bisulcus ◽  
Protection Area ◽  
The Cost ◽  
Production Possibilities Frontier

In this paper we study the cost-effective allocation of the land in the Cordilleran Protection Area (CPA), Region VIII, Chile, for the conservation of a highly threatened species: the Huemul (Hippocamelus bisulcus). Using a production possibilities frontier (PPF) approach, a linear programming optimization model for a ten-year time period is proposed. Our model takes into account both the preferences of the species for different habitats and the opportunity cost of the land. We evaluate different possibilities of land allocation and identify cost-effective alternatives in the provision of both conservation and income.The results confirm the hypothesis that both the population of Huemul and income from economic activities can be increased compared with current levels. Therefore the current allocation of the land in the CPA is not cost-effective.

The dynamics of housing affordability and housing demand analysis in Ankara

2018 ◽  
Vol 11 (5) ◽  
pp. 828-851 ◽  
Author(s):  
Akin Öztürk ◽  
Yunus Emre Kapusuz ◽  
Harun Tanrıvermiş
Keyword(s):  
Time Series ◽  
Real Estate ◽  
Time Series Analysis ◽  
Interest Rates ◽  
Housing Demand ◽  
Housing Affordability ◽  
Housing Supply ◽  
Macroeconomic Factors ◽  
Policy Makers ◽  
Content Type

Purpose Information about the current and future composition of the population in terms of household size and the desired housing preferences provides a good foundation for determining current and future housing needs. The policy-makers and developers can also use such knowledge as a starting point in their housing and commercial real estate investment decisions. In Turkey, urbanization and housing issues have accompanied the growth of industrialization. Within the scope of the country’s urbanization history, various instruments have been used to solve the lack of housing issues. The constructed houses should be accessible or affordable by fixed-income earners in the middle and lower socio-economic classes, who are mostly excluded. In particular, the real estate development sector has taken manageable risks by closely following the changing social and economic conditions and developing a variety of housing concepts. The purpose of this paper is to investigate the housing sector situation and affordability issues and then use time series analysis to present relationships between macroeconomic factors and housing demand in Ankara region. Design/methodology/approach The approach uses a survey of recent housing projects cover 2016 to 2018 for housing affordability conditions. Also, the study uses the Johansen co-integration test, variance analysis and impulse-response test to explain the relationships between macroeconomic indicators and housing demand for Ankara. Findings According to the results of time series analysis, the macroeconomic factors are affecting the demand and the number of houses sold. The research results try to find a negative or positive correlation between the numbers of houses sold and the monthly macroeconomic variables. Mortgage interest rates, usage permits, construction permits and household expenditure were found the most correlated with housing sold as a representative proxy of housing demand. This paper claims that current housing affordability is related to current housing supply and demand variables. If housing supply (as construction and usage permits) and income (as interest rates and expenditures) are at favorable levels, then housing transaction volumes increase. Research limitations/implications This paper highlights the need to examine how to assist developers to more rapidly develop knowledge and experience to reflect the implications of change in practice. This paper is formulating a housing demand model for real estate developers, using number of house sales and other administrative statistics in Ankara region. Practical implications If macroeconomic conditions are stable, then this encourages consumers to invest for housing whether they are affordable or not. According to the results, key factors of housing market are based on interest rates, income expectation and gaining social status. The consumers anymore not only want to buy a house to live and also want to gaining prestige. Originality/value The paper not only shows that current price is affordable or not but also supports why price is going up although price is not affordable. The findings identify how the market is developing and adhering to a product model development theory. The paper is different from previous studies because of the use of monthly income and supply proxies together in Turkey with time series model. These results are close to the theoretical expectations and provide good indicators for policy-makers.

Monetary policy, bank leverage and liquidity

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Van Dan Dang ◽  
Khac Quoc Bao Nguyen
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Monetary Shocks ◽  
Policy Changes ◽  
Financial Leverage ◽  
Content Type ◽  
Funding Sources ◽  
Dynamic Panels ◽  
Asset Portfolio ◽  
Policy Bank

PurposeThe study explores how banks design their financial structure and asset portfolio in response to monetary policy changes.Design/methodology/approachThe authors conduct the research design for the Vietnamese banking market during 2007–2018. To ensure robust findings, the authors employ two econometric models of static and dynamic panels, multiple monetary policy indicators and alternative measures of bank leverage and liquidity.FindingsBanks respond to monetary expansion by raising their financial leverage on the liability side and cutting their liquidity positions on the asset side. Further analysis suggests that larger banks' financial leverage is more responsive to monetary policy changes, while smaller banks strengthen the potency of monetary policy transmission toward bank liquidity. Additionally, the authors document that lower interest rates induce a beneficial effect on the net stable funding ratio (NSFR) under Basel III guidelines, implying that banks appear to modify the composition of liabilities to improve the stability of funding sources.Originality/valueThe study is the first attempt to simultaneously examine the impacts of monetary policy on both sides of bank balance sheets, across various banks of different sizes under a multiple-tool monetary regime. Besides, understanding how banks organize their stable funding sources and illiquid assets amid monetary shocks is an innovation of this study.

Political pressure on Turkey's Central Bank will go on

2015 ◽  
Keyword(s):  
Interest Rates ◽  
Sharp Decline ◽  
Content Type ◽  
Balance Sheets ◽  
The Past ◽  
Consumer Prices ◽  
Highly Sensitive ◽  
The Us ◽  
External Sources ◽  
Run Up

Significance The CBRT is expected to respond at its regular monthly interest rate-setting meeting to the fall in inflation in January to 7.2%. However, while the nearly 50% slide in oil prices since last June has led to a sharp decline in headline consumer prices, core inflation has been hovering near 9% for the last four months -- significantly above the CBRT's 5% inflation target. Just as importantly, Turkey's currency has fallen to a record low against the dollar, losing 7% over the past month because of the increasing politicisation of Turkish monetary policy and mounting expectations that the US Federal Reserve (Fed) will begin hiking interest rates as early as June, putting Turkish assets under renewed strain. Impacts CBRT independence is becoming one of the main focal points for market concern about emerging markets. Heavy reliance on external sources of finance will leave Turkey highly sensitive to resurgent dollar and increased US Treasury yields. Renewed lira weakness is likely to persist in the run-up to elections in June, which could also coincide with rising US interest rates. That would put further pressure on the balance sheets of Turkey's heavily indebted corporate sector.

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