We’re looking at the Hoshi & Ito paper and then will ask whether the US is different.
The core item (using lower case to indicate per GDP, eg bonds B/y = b) is their equation (1), though here I use gamma γ as more natural for GDP growth.
We can then add the surplus […]
Social Security is at the center of many current debates, with many politicians and citizens arguing that the program will become unsustainable in the near future. When looking at the program, it is important to look at the past figures and the present to get an understanding of the future of the Social Security Program.
Real estate usually makes up 15%-18% of America’s GDP. This number is broken down into 3%-5% from “Residential Investment” and 12%-13% from “Consumption Spending on Housing Services”. There is no doubt that this industry is an integral part of our economy, which is why it can be used as an indicator for the economy as […]
In 2015, 65.1 million people received benefits from the Social Security Administration and this number is constantly increasing. As we’ve talked about in class, the current demographic challenges facing our nation are daunting. It is a fact that a dwindling workforce must continue to produce in order to provide income for the expanding dependent population. […]
As I stated in my comment in the previous blog post, I was surprised that healthcare was not among the top two expenditures on the table. This is probably because I have heard so much about how rising healthcare costs, especially when it comes to pharmaceuticals in the United States, has been hurting people’s retirement […]
One of the things that intrigued me in class this week was thinking about the spending habits of those in retirement age. During a person’s lifetime, they’re theoretically preparing for retirement and planning their financial future. With the Baby Boomer generation starting to leave the workforce, it’s important to know their spending habits in order […]
The long-term visualization of home prices in the U.S. tells an interesting tale of overall domestic growth, labor force demographics, and mortgage industry changes.
Beginning in 1975, housing prices rise fairly steadily. A number of industry reforms aimed at providing credit to underprivileged demographics may have aided this growth (most taking place in […]
As we’ve already discussed the Case-Shiller index and mortgage metrics in order to assess the health of the housing market, I would like to take a slightly different approach: affordability. In order to gauge affordability in the housing market today, I will analyze two different ratios—the ratio of price to income, and the ratio of […]
The National Transfer Accounts project is spearheaded by Ronald Lee and Andrew Mason. It has compiled data on income and consumption by age, as well as demographic data, for an array of countries. Note that the focus below is on labor income, and is age-specific rather than aggregate [since different ages have different […]
Housing starts have historically indicated a strong real estate market, which indicates a strong economy. As you see from the FRED graph, the 2008 crash brought the US to almost 1/6th of the US’s peak in housing starts. We are still recovering in 2017, but gradually. January 2017 housing starts exceeded forecasts, and analysts […]
Courtesy of the graphs to Prof. Smitka who made them in excel using data from CoreLogic – thank you (Apologies if they’re blurry – I couldn’t make them any better than this as they are pictures)
The data for mortgage performance can be found at http://www.corelogic.com/ for anyone who wants the specifics of numbers. You […]
The labor force participation rate is the percentage of people in the civilian noninstitutionalized (not in prison or the military) population, aged 16 and older, who are either working or actively seeking work. This rate has been gradually decreasing since the early 2000s, but appears be leveling off around 62.5% (Graph 1). There are two […]
A multitude of useful construction data was released last week. In addition to overall construction spending, public construction spending, and total housing starts, it is perhaps equally as telling to examine construction per capita, and construction as a percentage of GDP. These metrics are necessary to assess real estate development within a slightly more realistic […]
Full employment is usually defined as any level of employment under 5%. Full employment means that all eligible workers regardless of skill level are in jobs. Economists believe that unemployment falls until it reaches the “natural rate” where everyone is employed and new hires only occur when people leave their current jobs for higher wages […]
Overall, the construction industry has experienced far from rapid growth in 2016. With oil prices low, major capital projects from firms involved in the energy and power industry saw low demand, correlating to a lackluster year within the greater engineering and construction sector. Total construction spending growth from a year ago, including residential […]
Long-run CPI trend
Figure 1: CPI for all items and all items less food and energy
This graph shows the long-run CPI trends since the 1950’s. Specifically, after 1955, when the reorientation of the economy following WWII was complete. There seems to be a steadily rising trend throughout the years as observed in the […]
Wednesday’s release of the Consumer Price Index (seasonally adjusted for All Urban Consumers) revealed inflation of .3% in December of 2016, leaving annual 2016 inflation at 2.1% before seasonal adjustment. This data release signals year over year price growth not seen since 2013 and a significant increase from the meager .7% inflation in 2015.
Try to build a simple Excel simulation of our growth model, streamlined. We can embed it in a full production function, but just use the following for simplicity:
Y0 = AK0α – output is a function of capital I0 = S0 = sY0 – investment is equal to savings K1 = K0 (1-δ) + […]
For many people, mortgage rates are the most important rates they will consider in their entire lives. Because of this, mortgage rates need to be understood and analyzed. This post delves into correlations that mortgage rates share with other interest rates and the maximum percentage of income that people should dedicate to mortgage […]
We frequently see claims that a lower tax rate – particularly of corporate or personal income taxes – will work miracles. That is seldom the case.
First, the stated tax rates are not the realized tax rates. While on paper someone with $500,000 in income is paying a 39.9% rate, the rate on […]