Jahr: 2017

Gunther Schnabl

Abstract

The paper analyzes the role of monetary policy for cyclical movements of investment and asset markets in East Asia and Europe based on a Mises-Hayek overinvestment framework. It is shown how the gradual global decline of interest rates has triggered wandering overinvestment cycles in Japan, Southeast Asia, and China. Similarly, it is shown how a one-size monetary policy within the European Monetary Union has not preserved the European Monetary Union from idiosyncratic economic development and crisis because of uncoordinated fiscal policies. With monetary policy crisis management being argued to impede financial and economic restructuring, a timely exit from ultra-expansionary monetary policies is recommended for both East Asia and Europe to reconstitute economic stability and growth.

JEL Codes: E52, E58, E63, F42.

Erschienen in

Asia Europe Journal (December 2017), Volume 15, Issue 4, pp 445–462.

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Katharina Knoll; Moritz Schularick; Thomas Michael Steger

Abstract

How have house prices evolved over the long-run? This paper presents annual house prices for 14 advanced economies since 1870. Based on extensive data collection, we show that real house prices stayed constant from the 19th to the mid-20th century, but rose strongly during the second half of the 20th century. Land prices, not replacement costs, are the key to understanding the trajectory of house prices. Rising land prices explain about 80 percent of the global house price boom that has taken place since World War II. Higher land values have pushed up wealth-to-income ratios in recent decades.

Keywords: house prices, land prices, neoclassical theory, transportation costs.

JEL Codes: N10, O10, R30, R40.

Erschienen in

American Economic Review, Volume 107, Issue 2, pp 331-353.

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Via SSRN