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October 18, 2012

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Links for 10-07-2012

Posted: 07 Oct 2012 12:03 AM PDT

Shiller: Housing Fever Can Work Both Ways

Posted: 06 Oct 2012 01:44 PM PDT

One of these days I'll figure out why I am so resistant to Robert Shiller's "stories" approach to economic issues:

Housing Fever Can Work Both Ways, by Robert Shiller, Commentary, NY Times: The boom and bust in the housing market was a dual social epidemic. First, there was an epidemic of positive thinking that led to high expectations for long-term home price appreciation — and for the economy, too. Then, after 2005, an epidemic of negative thinking discouraged many people from buying a house or from spending in general, and kept many employers from hiring.
We would all like to think that our economy makes more sense than that, and, in some ways, it does.
Certainly, there were other factors behind this boom and bust. But many of them — for example, Federal Reserve actions, government policies toward housing, even the effects on the United States of developments in other countries' economies — were arguably driven by this same social epidemic. ...
People waiting to buy a home may be waiting for a sense that prices have a rosy long-term future. Home prices in the United States have been rising for several months, and that is generating some optimism that now is the time to buy. However, the social waves also carry other, less encouraging stories that compete with such optimism — for example, foreclosures, unemployment, Europe's troubles and the Asian slowdown.
Will optimism about real estate emerge as a leading story? If this is a major upturning point for the housing market, it is still sociologically opaque.

Video: Eichengreen on Dollar Dominance

Posted: 06 Oct 2012 10:39 AM PDT

Something to watch -- if you're so inclined -- while I try to come up with something to post:

And, for more video, Stiglitz on Up With Chris.

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