The effect of zoning on land value

Two types of zoning are identified: externality zoning, which is designed to achieve a Pareto efficient pattern of land use, and fiscal zoning, which is designed to accomplish some other objective. (The latter, for instance, may be aimed at minimizing the tax rate in a community.) The paper shows that it is not in general possible using a priori theory to predict the sign (positive or negative) of the effect of either of these forms of zoning on aggregate land value in a community. It is shown, however, that under plausible assumption it can be argued that zoning as currently practiced in many U. S. communities probably has the effect of lowering aggregate land values in the communities doing the zoning.     

On the choice of immediate monetary targets

This paper studies the control problem of a stochastic monetary system. The Central Bank has the choice of two targets: the size of its portfolio of assets or the level of interest rate on that class of assets. If its objective is to minimize the variance of a monetary aggregate or of private sector interest rate, the conditions under which one or the other of the targets should be used are analyzed. However, if the ultimate objective is a minimum variance in a desired GNP level the effect of the immediate target is the same whether the central bank employs a money stock or a private interest rate target.     

Job suburbanization,zoning and the welfare of urban minority groups

This paper poses a model of the effects of job suburbanization and suburban exclusionary zoning on the welfare of blacks and other urban minority groups. It explores the circumstances under which blacks take suburban jobs and whether they are made better off if they do so. The possibilities that blacks outcommute from central area ghettos and that they relocate to suburban housing near the jobs are each considered. A hypothetical governmental project to subsidize the creation of 10,000 suburban jobs for blacks is explored in a cost-benefit framework, stressing the effects of suburban exclusionary zoning on the project's feasibility.     

Déjà Vu All Over Again: The Causes of U.S. Commercial Bank Failures This Time Around

In this study, we analyze why commercial banks failed during the recent financial crisis. We find that traditional proxies for the CAMELS components, as well as measures of commercial real estate investments, do an excellent job in explaining the failures of banks that were closed during 2009, just as they did in the previous banking crisis of 1985–1992. Surprisingly, we do not find that residential mortgage-backed securities played a significant role in determining which banks failed and which banks survived. Our results offer support for the CAMELS approach to judging the safety and soundness of commercial banks, but call, into serious question the current system of regulatory risk weights and concentration limits on commercial real estate loans.