Self-reinforcing effects between housing prices and credit

The financial crisis has brought the interaction between housing prices and household borrowing into the limelight of the economic policy debate. This paper examines the nexus of housing prices and credit in Norway within a structural vector equilibrium correction model (SVECM) over the period 1986q2–2008q4. The results establish a two way interaction in the long-run, so that higher housing prices lead to a credit expansion, which in turn puts an upward pressure on prices. Interest rates influence housing prices indirectly through the credit channel. Furthermore, households’ expectations about the future development of their own income as well as in the Norwegian economy have a significant impact on housing price growth. Dynamic simulations show how shocks are propagated and amplified. When we augment the model to include the supply side of the housing market, these effects are dampened.     

Critical factors in technological innovation and their policy implications

This paper explores the critical factors which affect the innovation proccess. Some ways in which some of these factors can be influenced by appropriate policy measures are discussed. In particular, the role of the federal government in promoting innovation is discussed.The role of the government in stimulating and nurturing the innovation process is a controversial one. Proponents of the free enterprise system, many of whom are spokespersons for various industries, have persistently pointed out the deleterious effects of regulation and control on the innovation process. By contrast, advocates of an activist government role are often able to cite the protection of the common welfare as a primary need for government intervention. In truth, the “government” is a patchwork of many governments, operating through many agencies and affecting firms and individuals at several levels and leverage points. The same regulation that has deleterious effects on Industry A may be a stimulus for innovation in Industry B. Even in Industry A, the regulation may act as a force in directing efforts toward certain types of R&D programs that would not otherwise be undertaken.In this paper we examine the specific instances where innovation projects, both product or process types, were affected by government regulation. We also briefly review the critical factors which affect the innovation process and how various governments in industrialized countries have taken actions to influence these factors. Finally, we examine some general guidelines for policymaking purposes.     

Optimale Schichtabgrenzung bei logarithmischer Normalverteilung

Zusammenfassung Optimale Schichtgrenzen werden under der Voraussetzung ermittelt, da? das Schichtungsmerkmal einer logarithmischen Normalverteilung folgt und gleich dem Untersuchungsmerkmal ist.     

Regulating Banks through Market Discipline: A Survey of the Issues

Abstract.  The interest in the application of market discipline to regulate the financial industry has boomed recently due to the proposed New Capital Accord. This paper reviews the potential role market discipline can play in financial regulation. We start with a discussion of the rationale for financial regulation and with a brief history of the current regulatory mechanisms. Next, a definition of market discipline as a regulatory mechanism is advanced. We evaluate the disciplining power various market participants have. Finally, we argue that more external risk management disclosure is a condition sine qua non in order to enable market discipline as a regulatory mechanism. In this respect, the Basle Committee has taken the right approach.     

Probenahme vom Band

Ohne Zusammenfassung     

Intraurban residential mobility: The role of transactions costs, market imperfections, and household disequilibrium

This paper presents a model of household residential search and mobility that focuses on microeconomic elements of household behavior and incorporates housing market features. The model is cast explicitly in terms of a rigorous model of housing demand, allowing the benefits from moving to be measured as the compensating income variation of the potential change in consumption. The empirical results indicate that large changes in economic variables, such as income and prices produce only small potential gains from moving and that a major factor in the moving decision is the magnitude of search and moving costs.